Spain’s real estate prices have surged past €2,000 per square metre, showing a 6.9% year-on-year increase. Discover how the Balearic Islands are driving growth with an 8.5% jump, and why Madrid remains Spain’s most expensive property market at €3,281/m².
Spain’s Real Estate Prices Are Soaring: Here’s What’s Happening
Thinking about buying property in Spain? You’re not alone. Spain’s real estate prices have been on a clear upward trend, surpassing the €2,000 per square metre mark for the first time since 2010. But what’s behind these rising numbers, where are prices climbing the fastest, and what should both buyers and investors expect right now? Let’s dive into the key insights from the latest market data and forecasts.
Spain’s Average Real Estate Prices Exceed €2,000 per Square Metre
According to the latest report from Sociedad de Tasación, the average price of both new and used housing in Spain rose to €2,047 per square metre in September 2025. This represents a 6.9% year-on-year increase and a 3.6% rise over just six months. The market’s momentum has been picking up, driven by greater mortgage availability, stable interest rates, and a continued lack of significant new supply.
Key average prices (as of June 2025):
- Spain average: €2,010 (now expected to reach €2,084 by year-end)
- Madrid: €3,281 (highest in the country)
- Balearic Islands: second highest, with rapid growth
For perspective, while prices are rising steadily, they still remain below the all-time peak of €2,290 recorded in 2007. However, the ongoing trend points toward further increases in the months ahead.
Regional Hotspots: Where Is Price Growth Strongest?
Not all regions are seeing the same growth. According to the report:
- Balearic Islands: Leading the charge with an 8.5% year-on-year jump, reflecting intense demand, especially from both Spanish and international buyers seeking lifestyle properties.
- Madrid: Holds the highest unit price in Spain at €3,281 per square metre, also posting strong annual gains (over 8% in some calculations).
- Other dynamic markets: Malaga and Valencia are also seeing price increases exceed 8% year-on-year.
- At the lower end sits Extremadura, with prices at just €993 per square metre and a modest 3.7% annual increase.
Among provinces, Madrid is closely followed by Barcelona (€3,135) and Guipúzcoa (€3,011). Notably, Guipúzcoa passes the €3,000 threshold for the first time since 2011, marking it as an emerging high-value area.
What’s Driving Spain’s Real Estate Boom?
- Financing Conditions: Improved access to mortgage credit and stable interest rates are encouraging buyers to act now, pushing demand higher.
- Lack of Supply: Even though there was a slight uptick in new homes during the first half of the year, overall inventory remains tight.
- Construction Costs: Building new homes is getting more expensive, with the cost per square metre rising to €1,323 (up from €1,275 last year), in part due to material and labor price increases.
Real Estate Confidence Is Up—And So Is the Effort Needed to Buy
The real estate confidence index in Spain has hit a new high of 58.9 out of 100—a sign of strong optimism among developers, agents, and investors. But this bullish market means homebuyers are having to spend a lot to become owners.
On average, it now takes 7.6 years of full salary to afford a home—a 2.4% year-on-year increase. This number is much higher in hot regions:
- Balearic Islands: 19.4 years’ salary (by far the highest)
- Madrid, Catalonia, Canary Islands: all above eight years
Takeaways for Buyers and Investors in Spain’s Real Estate Market
- Expect continued price growth in strongest markets—Madrid, the Balearics, Barcelona, Malaga, and Valencia are leading the way.
- Be prepared for higher purchase and construction costs, especially in major cities and popular coastal areas.
- Budget carefully: The effort required (years of income) is rising, particularly in the most desirable regions.
- Healthy market optimism offers reassurance for long-term investors, but affordability will remain a challenge for many first-time buyers.
Spain’s real estate market is characterized by strong demand, rising prices, and intense competition—especially in Madrid and popular Mediterranean and island locations like the Balearics. With new peaks in both price and market optimism, now may be a time of opportunity, but buyers should be cautious, well-informed, and financially prepared. As always, local expertise and a careful eye on trends will help you navigate the dynamic landscape of Spain’s property scene.
