Walter Finch
SPAIN’S housing market is showing no signs of cooling down, with a leading property analyst warning that prices will reach ‘levels never seen before in Spanish history’ by the end of 2025.
The prediction comes as official figures reveal house prices soared by a record-breaking 12.7% in the second quarter of this year – the highest annual increase since records began, according to Spain’s National Statistics Institute (INE).
Property investment expert Montse Cespedosa, who boasts over 27 years of banking experience, has issued a stark warning to potential buyers that current record prices are just the beginning.
“In the last quarter of 2025, both sales volumes and housing prices will reach levels never seen in Spain’s history,” she said.
The former banker, who now provides property advice on social media and analyses economic trends on television, urged anyone considering buying property to brace for further price hikes.
Despite the market already being at record levels, she warned there is no escape route from the chronic shortage of supply and excess demand plaguing the Spanish property sector.
Political authorities appear powerless to tackle the crisis, with no short-term solutions in sight as finding reasonably-priced housing becomes increasingly elusive for ordinary Spaniards and expats alike.
Paradoxically, Spain’s mortgage market is also hitting record numbers in 2025, with 243,257 home loans signed in the first half of the year – the highest figure since 2011.
“This year there’s a volume of mortgage operations in banking that I hadn’t seen for years,” Cespedosa noted.
While cheaper mortgages and lower monthly payments might seem like good news for buyers, they face the reality that property prices will continue climbing relentlessly upwards.
Despite the critical situation, Cespedosa ruled out an imminent housing bubble similar to the 2008 crash, when banks recklessly granted mortgages to people who couldn’t afford them.
“There are still no signs of a property bubble, but there is evidence of market overheating,” she concluded.
READ MORE: EXPLAINER: Why house prices in Spain are rising twice as much as EU average
The rental market offers little respite, with prices also spiralling exponentially and making it increasingly difficult for young people to move out of their family homes.
August saw rental costs jump 10.5% annually to €14.5 per square metre, according to property portal Idealista’s latest report.
The relentless price increases are forcing many young Spaniards to remain living with their parents longer to save money, fundamentally altering traditional patterns of independence and household formation across the country.
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