Explore the rising housing prices in Spain, now at €2,164/m², and the impact on sales in the evolving Spain real estate market.
In the ever-evolving landscape of the Spain’s real estate market, a striking paradox has emerged: while property values have reached unprecedented heights, the volume of sales appears to be deflating. Recent data reveals that the average price of housing has surged by an astonishing 12.5% compared to the peak of the real estate boom in 2007, now standing at a staggering €2,164 per square meter. This revelation, drawn from the latest Real Estate Registry Statistics published by the Association of Registrars, underscores the fact that 2024 has officially been designated the most exorbitant year in the annals of Spanish real estate history.
The upward trajectory of prices is particularly pronounced in the realm of new-build properties, which have set yet another record with an average price of €2,265 per square meter. Meanwhile, the second-hand housing market has also experienced a notable rebound, with prices climbing by 3% over the past year to reach €2,039 per square meter. However, the situation is far from uniform across the nation; certain regions, such as the Community of Madrid, the Balearic Islands, and the Basque Country, have witnessed price escalations that far exceed the national average, with some areas approaching an eye-watering €4,000 per square meter.
Delving deeper into the data reveals even more alarming figures. In the picturesque city of San Sebastián, properties are listed at an astonishing €5,708 per square meter, while the capital, Madrid, commands €4,517 per square meter, and Barcelona follows closely at €4,483. Palma, maintaining parity with its regional counterparts, sees prices at €3,771, while Bilbao, another contender among the most expensive provincial capitals, stands at €3,068 per square meter.
The appraisal firm Tinsa corroborates this upward trend, reporting a 6.6% increase in housing prices in January compared to the same period the previous year. Notably, the Balearic and Canary Islands have surpassed the price peaks of 2007, a testament to the resilience of the market. Analysts attribute this phenomenon to sustained high employment levels, which have bolstered household solvency and restored purchasing power over the past year. This robust demand is further fueled by declining interest rates and enhanced access to credit.
Despite the escalating costs, Spaniards have demonstrated an unwavering commitment to homeownership, with 2024 concluding with a remarkable 636,909 sales—an increase of 9.2% from the previous year. This figure comprises 505,145 transactions in the used housing sector and 131,764 in new constructions. Notably, the final quarter of 2024 saw registered sales soar to 172,551, marking the highest level since the third quarter of 2007.
Moreover, the analysis unveils a significant shift in financing trends: a staggering 71.8% of transactions were facilitated through mortgages, while less than 30% of buyers opted for cash purchases. This shift reflects a broader transformation within the market, as the prevalence of cash transactions has diminished. In total, the fourth quarter of 2024 witnessed the signing of 123,897 mortgages on registered homes, a 13.4% increase from the previous year and the highest volume since the first quarter of 2011. However, this surge in mortgage activity comes at a cost, as the average mortgage debt per square meter has seen a continuous rise over the past seven quarters, culminating in a figure of €1,542 per square meter in the last quarter of 2024.
The Spain’s real estate market stands at a crossroads, characterized by soaring prices and a notable shift in purchasing behavior. As the landscape continues to evolve, stakeholders must navigate the complexities of this dynamic environment with both caution and acumen.
