SPAIN’S housing boom shows no sign of slowing down after research from a leading real-estate agency revealed that property prices nationwide are on course to rise by over 7% across 2025.
According to Barcelona-based company Donpiso, the average value of a home is set to tip over €1,900 per square metre for the very first time – with the increase driven by moderate interest rates, strong demand and a limited supply of new houses.
The growth is even stronger in major cities such as Madrid or Barcelona, with average property prices in the most desirable urban areas expected to exceed €3,900 per square metre this year.
Interest is also surging in mid-sized cities or suburban areas close to large metropolitan zones, with many residents looking to find value by purchasing homes away from notoriously expensive city centres.
In a sign of increased demand, Donpiso forecasts over 800,000 property transactions in 2025 – representing a near 25% rise compared to the 641,919 deals recorded last year.
The steep growth has led some academics to argue that Spain is in the midst of a housing bubble set to burst at any minute – but higher-ups at Donpiso are not so sure.
READ MORE: Bank of Spain warns of a housing bubble with properties overvalued by up to 8.5%
According to Emilian Bermúdes, the company’s deputy general manager, the rise in property prices is positive, driven by a solid labour market and improving financial conditions – such as lower interest rates which allow buyers to access affordable mortgages.
“We don’t foresee a bubble,” she said, “but rather a year of stable growth, with particular emphasis on the best-connected urban areas.”
Housing prices in Spain have surged since the Covid-19 pandemic, driven by strong buyer demand, international clients and investors increasingly viewing property as a safe bet.
But the increase has left some angry, with many locals in large cities across Spain complaining that the spiralling cost of housing – whether buying or renting – has forced them to abandon the city centres they once called home.
Some have focused on tourism, with a rise in short-term holiday rentals, such as properties listed on Airbnb, blamed for fuelling a housing shortage that has driven up prices.
Earlier this year, the Bank of Spain warned that steep rises in property prices are being pumped up by overvaluation – but laid the blame of price spikes at the feet of the country’s housing shortage.
The bank’s director-general of financial stability, Daniel Perez, said: “House price rises are being caused by a lack of supply, though overvaluation remains at a moderate level.”
Click here to read more Spain News from The Olive Press.
