Spain’s real estate market has hit a historic new high, with house prices officially surpassing the peaks reached during the previous property bubble more than 15 years ago. New data released this week by the Ministry of Housing show the average price of a home in Spain now stands at €2,153 per square metre—translating to over €172,000 for a typical 75-square-metre apartment.
Madrid continues to lead the rankings, with property prices soaring to a record €3,732 per square metre. This means that an average apartment in the Spanish capital now costs nearly €280,000, marking the highest prices since the 2007 real estate boom.
House Prices Breaking Records—But What About Inflation?
In nominal terms (not factoring in inflation), Spanish property prices are now 2.5% above the highs seen during the last housing bubble. However, if we adjust for inflation—which has surged by 39.6% over the intervening years—current prices remain 37.1% below their historic maximum in real terms. According to the Ministry of Housing, the peak appraisal value back in 2008 would be roughly equivalent to €2,883 per square metre today, once inflation is considered. The Ministry also clarifies that these figures refer to appraised values, not actual purchase prices, which the General Council of Notaries pegs at €1,728 per square metre.
Madrid, Balearic Islands, and Valencia See Highest Growth
Over the past year, house prices in Spain have jumped by an average of 12.1%, with four consecutive quarters of double-digit growth. In just the last three months, the national average increased by 2.9%. Almost all regions saw price increases, with Cantabria recording the largest annual jump at 15.1%. The Balearic Islands and the Valencian Community followed closely behind at 14.5% each, and Asturias at 14.1%. Madrid ranks fifth, with prices rising 14% year-on-year.
By comparison, the provinces with the slowest growth were Extremadura (3.8%), Ceuta and Melilla (6.3%), Galicia (9.4%), and Castilla y León (9.8%). Nevertheless, most regions reported double-digit growth, underscoring the widespread demand and robust real estate market across Spain.
Where Are House Prices Highest—and Most Affordable?
Madrid holds the title for Spain’s priciest property market, but the Balearic Islands are not far behind at €3,672 per square metre. Other expensive regions include the Basque Country (€2,866) and Catalonia (€2,548). In contrast, Extremadura remains Spain’s most affordable region, with prices averaging just €936 per square metre.
What’s Driving the Surge in Spanish Real Estate?
Experts attribute Spain’s accelerating house prices to factors such as limited housing supply, sustained domestic and international demand, ongoing urbanization, and improved economic conditions. The trend is particularly strong in metropolitan hubs and coastal areas, where both resident and investor interest is high.
What Does This Mean for Buyers and Investors?
The recent surge in prices, especially in sought-after regions like Madrid and the Balearics, signals ongoing confidence in the Spanish real estate sector. However, buyers should be mindful of the difference between nominal and real price increases, especially given the impact of inflation over the past decade and a half.
Bottom line: Whether you’re looking to buy, sell, or invest, keeping an eye on regional differences and broader economic factors will be key as Spain’s property market continues to evolve in record-setting.
