The Spanish residential real estate market continues its impressive run, with new data and expert analysis signaling robust growth is set to last until at least late 2027. According to the latest “Real Estate Market Report: Current Affairs and Perspectives 2025,” presented in Barcelona by leading consultancy Forcadell and the University of Barcelona (UB), fears of a housing bubble – like the one that burst in 2007 – are largely unfounded.
Spain’s Real Estate Boom: Why This Time is Different
The new report makes it clear: Spain’s real estate surge is not a bubble. Unlike the overheated market that led to the 2007 crash, today’s growth is underpinned by stricter lending standards, prudent banking practices, and a balanced financial system. In 2024, mortgage credits are expected to total €85 billion, just half the nominal volumes seen in 2006. Notably, both household and business deposits now exceed the loans granted, reinforcing financial equilibrium. This stability is further bolstered by recent interest rate relaxations from the European Central Bank.
Record-Breaking Sales and Rising Prices
The market’s momentum is undeniable. Forcadell estimates that in 2025, housing prices across Spain will rise about 8%, while overall property sales climb 7.5% to reach 850,000 units — the third highest figure in Spain’s modern history. The number of second-hand property transactions will also hit a record for the second consecutive year, potentially reaching 765,000 homes sold. By 2026, the market could surpass even these records, driven by a favorable mix of rising real wages, stable employment, low mortgage interest rates, and increased bank lending.
Youth Movement: The Biggest Shift in Decades
A striking new trend is the migration of younger buyers — especially those under 40 — from the rental market to homeownership. The report forecasts that 2025 will see the largest-ever transfer of parental capital to children purchasing homes, compensating for younger generations’ limited savings. This generational shift is reshaping market dynamics and fueling further home sales.
Rentals: Fewer Options, Little Relief from Caps
Spain’s rental market, meanwhile, is grappling with a sharp drop in supply and rising costs. The report finds that the rent cap has done little to tame prices, with Barcelona — where implementing it would require more than 25% price reductions in many cases — seeing virtually no real adjustments. Many existing rental contracts remain unaffected by the cap, and much of the available housing shifts to seasonal or tourist rentals.
Landlords now face higher risks and reduced profitability, especially due to new regulations making evictions of vulnerable tenants more difficult. Construction of new homes lags far behind demand: since 2019, only an average of about 2,500 new units per year have been added, contributing to the shortage.
Tourist Rentals Play a Minor Role
Contrary to popular belief, the boom in short-term tourist accommodations (VUTs) is not the primary reason for surging rents. INE data reveals that STVs account for only 1.43% of total housing and just 7% of the overall rental stock, making their impact on rental inflation negligible.
Tertiary Market: Logistics and Offices Rebound
Beyond housing, Spain’s logistics real estate market remains strong. Decentralization trends favor developments in peripheral areas, where land is available and costs are lower. Capital investment is high, signaling long-term confidence, with multiple large portfolio deals expected to close soon.
In office real estate, a rise in relocations and demand for larger spaces may signal a turning point toward more in-person work. Challenges remain — like keeping vacancy rates low in Barcelona’s prime districts — but both Barcelona and Madrid are expected to maintain healthy leasing activity, with Madrid seeing over 500,000 square meters leased annually.
Bottom Line
The Spanish residential real estate market in 2025 is booming, but underpinned by discipline and sustainable growth. With robust demand, prudent financing, and a generational shift toward homeownership, Spain looks set to remain a hot property destination through at least the end of 2027. Fears of a market crash or bubble are not supported by current data, making this an opportune time for buyers, sellers, and investors to engage with one of Europe’s strongest property markets.
