HOUSE prices in Spain rose by twice as fast as the European Union average in the first three months of 2025.
Figures from Eurostat showed Spanish prices soaring by 12.3% in the first quarter, over twice as much as the EU median of 5.7%- compared to the same period last year.
Portugal (16.3%), Bulgaria (15.1%) and Croatia (13.1%) surpassed Spain in real estate price hikes with ‘holiday homes’ said to be a factor.
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That’s the view of Raymond Torres, from the Funcas economic think-tank based in Madrid.
Speaking to El Mundo, he said: “Many homes in the most in-demand areas have switched from main residencies to holiday homes.”
Another factor behind price increases is the rising population, according to Torres
“Population growth and the creation of new households driven by immigration has led to an increase in demand,” he explained.
“Supply does not satisfy the high demand and therefore causes an increase in prices.”
Francisco Iñareta, spokesman for property portal Idealista told El Mundo that a number of circumstances have combined to create the current high price situation.
“A lack of new housing together with the emergency the rental market is going through and the fall in interest rates has caused prices to rise,” he stated.
“Second-hand housing has not been able to respond to a gigantic demand that does not stop growing,” added Iñareta.
Raymond Torres commented that the drop in interest rates ‘makes mortgages cheaper and in some way boosts demand’.
“But as supply does not react quickly to the increase in demand – and in Spain with long delays- the benefit of interest rate cuts simply put up prices,” he observed.
“Another price driver is legal uncertainty, where real estate awards can be counteracted or slowed down by all kinds of legal disputes,” Torres concluded.
In contrast within the EU, property prices rose by just 0.6% in France during the first quarter of the year.
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