In Madrid, flats are snapped up within two months. Explore the latest trends in Spain’s real estate market, per Tecnocasa and Universitat Pompeu Fabra.
In the ever-evolving landscape of Spain’s real estate market, a remarkable phenomenon has emerged: homes are being snapped up at an unprecedented pace. According to the XL Report on the Housing Market, compiled by the Tecnocasa Group in collaboration with the Universitat Pompeu Fabra (UPF), the average duration for a property to remain on the market has plummeted to a mere 73 days in 2024. This figure represents a historic low since the inception of the data series in 2017, underscoring the fervent demand that currently characterizes the sector.
The report elucidates that in major urban centers, the situation is even more pronounced. In Madrid, for instance, flats are typically acquired within the first two months of their listing, while Bilbao and Barcelona exhibit averages of 61 and 68 days, respectively. This rapid turnover is indicative of a burgeoning real estate fervor, fueled by a confluence of factors including declining interest rates, escalating average mortgage values, and a constrained supply of available properties.
Despite the resurgence in housing demand—reportedly rebounding by nearly 40% within the span of a year—the supply has concurrently diminished by approximately 10%. This disparity has led analysts to characterize the market as “boiling,” with demand significantly outpacing supply, which remains insufficient to meet the needs of prospective buyers. Over the past 15 years, Spain has witnessed the formation of approximately 275,000 new households annually, juxtaposed against a supply of around 120,000 housing units. While the previous surplus of unsold homes post-financial crisis has largely been absorbed, the remaining inventory is predominantly situated in areas of low demand.
The Bank of Spain’s latest report highlights a staggering housing deficit exceeding 600,000 units, revealing a structural misalignment between supply and demand. In this context, where housing supply exhibits pronounced inelasticity, it is reasonable to anticipate the continuation of market dynamism. Without a coherent and sustained housing policy, accessibility challenges for vulnerable demographics are likely to persist.
On an international scale, Spain’s real estate market behavior stands in stark contrast to that of other European nations. While countries such as Germany and France have experienced declines in house prices amid economic slowdowns, Spain’s prices continue to ascend sharply, propelled by robust economic momentum. The report notes a year-on-year increase exceeding 10% in the prices of second-hand flats, which constitute the majority of the housing stock. By the end of 2024, the average sale price reached 2,802 euros per square meter, still shy of the 2007 peak of approximately 3,500 euros per square meter.
Accompanying this price surge is a notable increase in the average mortgage amount, which has reached levels not seen in 14 years. Last year, the average mortgage stood at 130,894 euros, reflecting an 11% year-on-year growth. The decline in interest rates has facilitated greater access to mortgage financing, enabling buyers to secure larger loans, albeit still below the 180,000 euros typically granted during the previous real estate bubble. This shift is not merely a reflection of lower property prices but rather a consequence of banks adopting more conservative lending practices. Analysts emphasize that the Spanish mortgage market remains firmly within the bounds of credit orthodoxy, in stark contrast to the pre-crisis era when banks frequently extended loans with loan-to-value ratios exceeding 100%. Today, prudence governs the issuance of mortgages, ensuring a more stable financial environment.
