Authored by the expert who managed and guided the team behind the Spain Property Pack
Everything you need to know before buying real estate is included in our Spain Property Pack
What is happening in Spain’s real estate market? Are prices going up or down? Is Barcelona still a hotspot for foreign investors? How is Spain’s government impacting real estate policies and taxes in 2025?
These are the questions everyone is asking us every day—professionals, buyers, and sellers alike, from Madrid to Valencia and beyond. Perhaps you’re wondering the same thing.
We know this because we stay deeply connected with local professionals and people like you, diving into the Spanish real estate market every single day. That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market trends and dynamics.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) Spain’s property prices will rise moderately as the economy rebounds from the pandemic
Spain's property market is on the rise as the economy bounces back from the pandemic.
One of the main reasons for this growth is the increase in property transactions, with international buyers making up over 21% of these deals in 2023. This shows a strong interest in Spanish real estate, especially from foreign investors who are eager to own a piece of Spain's charm.
Coastal areas like the Costa del Sol and Costa Blanca are particularly popular, drawing in lifestyle buyers and investors thanks to their great weather and affordable prices. This wave of foreign investment is a big factor in pushing property prices up.
Government efforts to boost the economy have also helped, with EU-funded infrastructure projects improving local economies and connectivity. These developments often lead to higher property values. Plus, low interest rates, with the Euribor rate expected to drop to about 2.1% by 2025, make buying property more attractive.
Spain's economy is looking strong, with positive GDP growth forecasts that boost consumer confidence and purchasing power. This makes Spain a hot spot for property investment. Falling unemployment rates also create a more stable environment for potential homeowners and investors.
The demand for vacation homes is climbing as tourism picks up again, especially in coastal regions. Urbanization in major cities, where housing is limited, is also driving demand and keeping prices on the rise. The limited supply of housing in popular areas is a key issue, maintaining the upward price trend.
Sources: Bric Group, Think Spain, SGM Legal Spain, Hello Here
In this video, Spain's property price trends are discussed, with insights into how demand and limited supply are driving moderate price increases as the economy recovers.
2) Urban rental yields will dip slightly as property prices grow faster than rents
Property prices in major Spanish cities like Madrid, Barcelona, Valencia, and Malaga have been climbing steadily.
In 2023, these cities saw average price hikes of 10% to 13%, and this upward trend is expected to continue into 2024 due to a supply shortage in key areas.
Meanwhile, rental prices haven't kept up with this rapid rise. From January to June 2024, rental prices increased by 6.3% to 12.7% year-on-year, which is still less than the growth in property prices.
Adding to this, the rental component of the CPI showed much more contained increases of 2.2% year-on-year in June 2024, highlighting the disparity.
This mismatch suggests that rental yields are not keeping up. Real estate agencies report that the gap between rental yields and property price increases is narrowing.
Rental yields in urban centers will decline slightly as property prices outpace rental growth.
Sources: Savills, CaixaBank Research, SGM Legal Spain
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Rental yields in Andalusia will rise significantly as the tourism sector grows
Andalusia is seeing a huge boom in tourism, which is boosting rental yields.
In 2023, the region welcomed 12.2 million international visitors, breaking past records. This trend didn't slow down in 2024, with 12.1 million arrivals in just ten months, an 11% jump from 2019. The surge in tourists means more people are looking for places to stay, pushing up rental occupancy rates.
During the summer of 2023, over 12 million tourists flocked to Andalusia, setting a new seasonal record. This demand is also driven by short-term rental platforms like Airbnb. In Malaga, a favorite spot in Andalusia, Airbnb listings shot up by 29.9% from 2023 to 2024, totaling 32,468 listings. This shows how popular the area has become for visitors looking for temporary stays.
The Andalusian government is seeing a financial boost from this tourism wave, expecting to rake in over €22.5 billion in 2023, a big leap from pre-pandemic times. The region is on track to attract a record 33 million tourists by the end of 2023, with each spending an average of €78.70 daily, the highest ever. These numbers underline the strong health of the tourism sector, which is a key driver for rental property demand.
Sources: Andalucia.com, The Olive Press, Sur in English
4) Rental yields in the Balearic Islands will drop as property prices outpace rental rate growth
The Balearic Islands are experiencing a notable surge in property prices.
In Mallorca, for instance, the price per square meter has jumped by 10.5% from January 2022 to January 2024. This increase is largely fueled by foreign buyers, who made up over 35% of real estate transactions in 2022. The allure of the islands, with their stunning landscapes and vibrant culture, continues to attract international interest.
However, rental rates haven't kept up with this property boom. While there was a 17.3% rise in rental prices over the past year, it's still not enough to match the soaring property values. By February 2024, the average rental cost was €17.15 per square meter, marking just a 2.7% increase from the previous month.
This gap between property prices and rental rates is leading to a decline in rental yields. The influx of foreign buyers, coupled with a limited supply of rental properties, is pushing property prices higher while rental yields remain stagnant. This trend is particularly challenging for those looking to invest in rental properties, as the returns are not as lucrative as they once were.
For potential buyers, understanding this dynamic is crucial. The Balearic Islands offer a unique lifestyle, but the financial landscape is shifting. As property prices continue to rise faster than rental rates, rental yields are likely to decline further, impacting investment decisions.
Sources: Yes Mallorca Property, Euro Weekly News, Balearic Properties
5) British buyers will return to Spain’s property market as Brexit concerns fade
British buyers are flocking back to the Spanish property market as Brexit worries fade away.
In 2024, Taylor Wimpey España saw a staggering 120% jump in British reservations compared to 2023. This surge shows that British confidence in Spanish real estate is bouncing back strong.
British tourists are also making their presence felt in Spain. In 2023, 17.3 million Brits visited, accounting for 20.4% of all tourists. This trend is not just about numbers; British holidaymakers are spending more, showing their growing interest in Spain.
The British pound has found its footing against the euro, making Spanish properties more appealing. This financial stability is a game-changer for British buyers looking to invest in Spain.
Efforts to simplify legal and financial processes post-Brexit are paying off. These changes have lowered the barriers for British buyers, making it easier to dive into the Spanish property market.
Sources: Euro Weekly News, IFEMA, Spanish Property Insight, Travel and Tour World
Get fresh and reliable information about the market in Spain
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
6) Chinese buyers will increasingly target Spain's urban properties due to favorable investment conditions
Chinese buyers are increasingly interested in Spain's urban properties due to favorable investment conditions.
In recent years, Chinese investment in overseas real estate has surged, with Spain emerging as a top destination. This trend is driven by Chinese developers and investors seeking stable markets, and Spain fits the bill perfectly. The Spanish property market is particularly appealing because of its strong demand and limited supply, which have pushed home prices up, especially for new builds.
In 2024, new homes in Spain experienced a 10.7% year-on-year price increase, making it a hot spot for investors eyeing price appreciation. The Golden Visa program is another magnet for Chinese investors. By purchasing property worth €500,000 or more, investors can gain residency, a perk that has been especially popular among Chinese expatriates.
This program offers both ease of access and investment benefits, making it a win-win for those looking to settle in Spain. Chinese government policies have also encouraged overseas investment, providing additional funding opportunities. This, coupled with the growing Chinese communities in Spanish cities, makes Spain even more attractive.
Chinese buyers are drawn to Spain not just for its investment potential but also for the lifestyle and cultural experiences it offers. The vibrant cities, rich history, and welcoming atmosphere are significant factors. With the Chinese government supporting overseas investments, the trend of Chinese buyers flocking to Spain is likely to continue.
Sources: Knight Frank, Orience, CaixaBank Research
7) Property prices in the Basque Country will rise as it becomes a tech industry hotspot
The Basque Country is becoming a hotspot for tech professionals, driving up property prices.
With significant investments in tech infrastructure, like the expansion of the Basque Country Technology Park, the region is buzzing. This park is home to 660 companies employing over 23,000 people, generating a turnover of 7.3 billion euros in 2023. It's a tech hub that's hard to ignore.
Tech startups are popping up everywhere, with over 1,000 expected by 2024. These startups are diving into sectors like eHealth, biotech, and Industry 4.0, attracting more tech professionals to the area. The regional government is also on board, rolling out a new Industrial Development Plan to boost innovation and growth.
Real estate in tech-centric areas is on the rise. In 2024, house prices in Spain jumped by 8.1% year-on-year, and this trend is set to continue. Experts predict an average increase of 6% in 2025, especially in tech-focused regions like the Basque Country. It's a pattern seen in other tech-driven areas, hinting at a similar future here.
Think of Silicon Valley, where tech has transformed the property market. The Basque Country is on a similar path, with its tech scene booming and property prices following suit. Investors are taking note, seeing the potential for growth and returns.
For those considering buying property, the Basque Country offers a unique blend of tech innovation and cultural richness. It's not just about the numbers; it's about being part of a vibrant, forward-thinking community. The future looks bright for this region, making it an exciting place to invest and live.
Sources: Business Focus, Bicaraba, Think Spain, Basque Press, Basque Country Technology Park
8) Spain will introduce incentives for energy-efficient homes, impacting property values
In 2023, Spain's government decided to boost energy efficiency in homes across the country.
They plan to renovate over half a million homes by 2026, using 6.8 billion euros from the EU's Next Generation funds. This is a big deal because Spain's buildings are some of the least energy-efficient in the EU. The government is serious about making changes, and this could impact property values.
To make this happen, the government rolled out various subsidies for green building projects. For example, they set aside 200 million euros specifically for solar thermal systems. They also offered substantial subsidies for air-source heat pumps, encouraging both individuals and companies to invest in these technologies.
People are catching on to this trend. There's a growing demand for energy-efficient homes, which has led to an 8.1% increase in the House Price Index. This means that more people are looking for modern, energy-efficient properties, and they're willing to pay more for them.
New home prices are also on the rise, reflecting the increased demand for energy-efficient appliances and systems. This shift in consumer preference is not just a trend; it's becoming a significant factor in the real estate market.
Sources: Euronews, Solar Thermal World, Think Spain
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) New short-term rental regulations will affect investment property profitability in tourist areas
In 2023 and 2024, Spain tightened regulations on short-term rentals in tourist hotspots like Barcelona and Valencia.
Barcelona, for example, has plans to ban all short-term rentals by 2028, aiming to tackle issues like tourist-phobia and housing shortages. This means fewer properties will be available for tourists, making it tougher for property owners to profit from short-term rentals. Valencia is also cracking down, with new rules that include fines up to €600,000 for illegal rentals, adding more red tape for property owners.
These changes have already started to impact the market. In Barcelona, the looming ban has led to a drop in short-term rental listings on platforms like Airbnb. The city is also pushing for more social housing, which further limits the number of properties available for short-term rental. This has left many property investors worried about their returns.
Investors are now considering a shift from short-term to long-term rentals to stay compliant with the new laws. The profitability of short-term rentals is under threat, and many are rethinking their investment strategies. The new regulations are making it less attractive to invest in short-term rental properties, especially with the added bureaucratic hurdles.
For those looking to buy property in these areas, it's crucial to understand how these regulations might affect potential earnings. The landscape is changing, and long-term rentals might become a more stable option for investors. The focus is shifting towards sustainable housing solutions, which could reshape the property market in these tourist-heavy cities.
Sources: Spanish Property Insight, AA, Terra Meridiana
This video examines the impact of stricter Airbnb regulations in cities like Seville, showing how they are reshaping investment strategies and affecting short-term rental profitability.
10) Madrid’s suburbs will gain appeal as people look for larger spaces and better value
Madrid's suburbs are becoming a hot spot for those looking for more space and better value.
Central Madrid's property prices have skyrocketed, with the average cost hitting €5,113 per square meter by the end of 2024. This 21.43% jump from the previous year has made city living a stretch for many wallets. As a result, people are eyeing the suburbs for more affordable options.
The pandemic has shifted priorities, with a growing demand for larger living spaces. Yet, the average home size in Madrid has shrunk by 17% since 2015, now averaging just 99 sqm. This has nudged many to explore suburban areas where spacious homes are more common.
Remote work has changed the game, allowing folks to live further from the city without sacrificing their work-life balance. This flexibility has led many to seek better deals and bigger homes in the suburbs. For instance, in El Atazar, property prices were a mere €403 per square meter in October 2024, a stark contrast to central Madrid's high costs.
Suburban living offers not just affordability but also a chance to enjoy a more relaxed lifestyle. With the convenience of remote work, people are finding that they can have the best of both worlds: space and savings.
As more people make the move, the suburbs are becoming vibrant communities with their own unique charm. This shift is making suburban areas increasingly appealing for those who want to escape the hustle and bustle of city life while still staying connected.
Sources: Urbanitae Blog, Indomio, Metro Madrid
11) Eco-friendly homes will become more popular as Spanish buyers grow more environmentally conscious
Eco-friendly homes are gaining traction in Spain as environmental awareness grows among buyers.
In 2023, a study revealed that many Spanish homes needed upgrades to meet the European Union's energy efficiency standards. This has sparked a demand for eco-friendly renovations, as homeowners look to improve their properties and reduce energy costs.
The market for green building materials in Spain is on the rise. From 2024 to 2029, it's expected to grow significantly, driven by government programs promoting sustainable materials. This shift is evident in the increasing revenue of the hardware and building materials market, which is now favoring eco-friendly options.
Buyers are increasingly interested in homes with energy-efficient systems and renewable energy sources. Real estate listings are highlighting features like solar panels and smart technology, which are becoming major selling points for potential homeowners.
The Spanish government is playing a key role in this transition by offering financial incentives and tax rebates to those who choose green construction materials and energy-efficient solutions. This support is making it easier for people to invest in eco-friendly homes, aligning with the growing trend of sustainability.
As more people become conscious of their environmental impact, the demand for eco-friendly homes is expected to continue rising. This trend is not just about saving money on energy bills but also about contributing to a more sustainable future.
Sources: Iberian Property, Bona Fide Research, Think Spain, Prop News Time
Don't buy the wrong property, in the wrong area of Spain
Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
12) Luxury property demand in Spain will rise as high-net-worth individuals look for safe investments
The demand for luxury properties in Spain is booming, and it's not slowing down anytime soon.
In 2024, places like Marbella, Estepona, and Benahavís saw a 20% jump in luxury property sales compared to the previous year. This isn't just a blip; Estepona and Benahavís have experienced a staggering 120% growth over the past 16 years. These areas are becoming hotspots for those looking to invest in high-end real estate.
What's driving this surge? It's the growing number of high-net-worth individuals around the world. They're on the hunt for safe and stable investments, and real estate is a top pick. Spain's stable political and economic climate makes it a prime choice for these savvy investors.
But it's not just about the numbers. Spain offers an incredible quality of life that attracts wealthy buyers. With its mild climate, stunning beaches, and rich culture, Spain is perfect for those wanting a luxurious lifestyle. The development of high-end infrastructure in areas like Marbella and the Costa Blanca only sweetens the deal.
These regions are not just about beautiful homes; they offer a lifestyle. Imagine waking up to the Mediterranean sun, enjoying world-class golf courses, and dining in exquisite restaurants. It's no wonder that Spain's luxury property market is so appealing to those who can afford it.
As more high-net-worth individuals look for safe havens for their wealth, Spain's luxury real estate market is set to thrive. The combination of investment potential and lifestyle allure makes it a top choice.
Sources: Pure Living Properties, Premium Villas Costa Blanca, La Costa Casa
In this video, we can see that luxury homes in Marbella are becoming increasingly popular among high-net-worth individuals seeking secure investments.
13) Spain’s expanding expat community will boost property demand in multicultural neighborhoods
Spain's growing expatriate community is noticeably shaping property demand, especially in multicultural neighborhoods.
In the first half of 2024, foreigners bought 69,412 homes in Spain, showing a clear interest in the country's real estate market. This surge is particularly evident in areas like Madrid, Valencia, and Catalonia, where expatriates are drawn to the vibrant mix of cultures. These regions are not just popular for their diversity but also for their international schools, which cater to the needs of expatriate families.
These international schools are a telltale sign of a significant expatriate population, which in turn drives up property demand in these neighborhoods. The presence of such schools makes these areas more attractive to families from abroad, who are looking for a community that feels like home. This demand is reflected in the moderate increases in foreign property transactions in these regions.
Real estate developers are catching on, increasingly targeting international buyers with new projects. New home prices have risen by 9.8% year-on-year, a testament to the demand for modern, energy-efficient properties that expatriates often seek. These homes are not just about luxury; they offer the kind of living standards that international buyers expect.
The resale market is also buzzing, with existing home prices climbing by 7.9%. This trend underscores the strong influence of expatriates on property demand, as they often look for homes that are ready to move into, in neighborhoods that offer a sense of community and belonging.
As Spain continues to attract a diverse international crowd, the property market in multicultural neighborhoods is set to thrive. The growing expatriate community is not just a trend; it's reshaping the landscape of Spanish real estate, making these areas more dynamic and sought after.
Sources: INE, Sur in English, Expat Arrivals, Think Spain
14) Spain's coastal regions will experience a property demand surge as remote work and lifestyle changes drive interest
Remote work is reshaping how people live, with 22% of higher-income earners in Spain working remotely in 2024.
In the sunny Costa del Sol, property prices jumped 12.4% in the second quarter of 2023, outpacing the national average. This surge is a clear sign that more people are drawn to the coast, likely for its appealing lifestyle.
Spaniards are increasingly valuing the flexibility and balance that remote work offers, leading to a hunt for homes with dedicated office spaces. In hotspots like Costa del Sol, the demand for such properties is outstripping supply, highlighting a strong interest in homes that cater to remote work needs.
Coastal living is getting a lot of buzz, thanks to media and social media showcasing its perks, like a better quality of life. This positive spotlight is pulling more buyers to these areas, as they chase a more fulfilling lifestyle.
Spain is a top choice for digital nomads, ranking fourth in the Global Remote Work Index in 2023. Its great remote work setups, pleasant climate, and solid cybersecurity make it a magnet for those who can work from anywhere.
With these trends, the coastal regions of Spain are set to see a surge in property demand, driven by lifestyle changes and the rise of remote work.
Sources: Statista, BRIC Group, eSales International, NordLayer
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Home office-equipped properties will gain popularity as remote work becomes more common
Remote work is reshaping Spain's real estate market, making home office spaces a hot commodity.
In 2023, about 25% of high-income earners in Spain were working from home, a trend that's only growing. This shift is pushing people to look for homes that offer more than just a place to live; they want spaces that support a flexible work-life balance.
Real estate agents are noticing that homes with adaptable workspaces are in high demand. As more companies embrace hybrid work models, this trend is expected to continue. Buyers are willing to pay more for properties that cater to their new work-from-home needs.
In Spain, the desire for dedicated office spaces is not just a passing phase. It's becoming a key factor in property sales, with higher sale prices for homes featuring these spaces. This demand is a clear indicator of how remote work is influencing buying decisions.
For those considering a move to the Spanish countryside, it's worth noting that properties with home offices are increasingly sought after. This is especially true as people prioritize a better quality of life, blending work and leisure in a single location.
As remote work becomes a permanent fixture, the real estate market is adapting. Homes that offer the right work environment are not just desirable; they're becoming essential for many buyers.
Sources: Alegria Real Estate, Statista, Kenjo Blog
Our team found this video where the Digital Nomad Visa is highlighted, showing how it supports remote workers and increases demand for homes with office spaces.
16) Spain's tech hubs will see more young professionals moving in, affecting local real estate markets
Spain is becoming a hotspot for young professionals in the tech industry.
In 2023, the tech job market in Spain grew by 5.8%, outpacing the national economy. This boom has created thousands of new jobs, especially in tech hubs like Barcelona, which alone added 26,000 new jobs last year. The tech scene is buzzing, and it's not just about jobs; it's about a lifestyle that attracts talent from all over.
Regions like Catalonia have seen the number of tech companies more than double in five years, with 96 tech hubs now established. This growth is fueled by major investments, such as the €12.25 billion Digital Spain 2025 agenda, which is reshaping the country's digital landscape. Venture capital is also pouring in, with Spain raising €2.8 billion in 2023, making it a fertile ground for startups and innovation.
Young professionals are flocking to Spain's lively cities, drawn by a high quality of life and a lower cost of living compared to other European tech hubs. This influx is shaking up local real estate markets, especially in tech-heavy areas like Barcelona's 22@ district. Here, rental and property prices are climbing as demand for co-living and flexible housing solutions rises.
As more young professionals move in, the demand for modern living spaces is transforming neighborhoods. The trend is clear: tech talent is reshaping urban landscapes, making them more dynamic and appealing. This shift is not just about work; it's about creating communities where innovation thrives.
Sources: Nucamp, Nucamp, Mobile World Capital
17) Demand for accessible, senior-friendly housing will rise in Spain due to its aging population
Spain's aging population is a key driver for accessible and senior-friendly housing.
As of early 2024, nearly 10 million Spaniards are over 65, and this number is set to grow. By 2050, over 30% of the population will be seniors, highlighting a significant shift in demographics. This means more people will need homes that cater to their changing needs as they age.
People in Spain are living longer, with the median age expected to rise from 43.5 years in 2020 to 51.8 years by 2050. This increase in life expectancy means that housing must adapt to accommodate older residents, offering features like step-free access and emergency support systems.
The Spanish government and the National Institute of Statistics have noted this trend, emphasizing the need for more senior-friendly housing. The real estate market is responding with a focus on senior living, planning €500 million in investments for new developments. This includes 3,229 new units, a significant boost to the current supply.
Developers are increasingly interested in creating communities that offer not just housing but also amenities tailored to older adults. This includes social spaces, healthcare facilities, and easy access to public transport, making life easier and more enjoyable for seniors.
With these changes, Spain is becoming a more attractive option for those looking to invest in property that caters to an aging population. The focus on senior living is not just a trend but a necessary evolution in the housing market, driven by the country's demographic shifts.
Sources: Statista, Urbanitae Blog, Iberian Property
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.