Housing prices in Spain continue their upward trajectory, with no signs of slowing down. In the second quarter of 2024, the price of free-market housing saw an annual increase of 7.8%, marking the largest rise in two years, according to the National Statistics Institute (INE).
Compared to the first quarter, prices grew by 3.6%, making this the 41st consecutive quarter of price increases.
New build prices reach historic highs
Newly built homes have been driving this price surge, with their costs soaring by 11.2% year-on-year in the second quarter. This is the largest increase since 2007, just before the global financial crisis. The rise in new build prices is 1.1 points higher than the previous quarter, reflecting a strong demand for new housing stock in a market with limited supply.
Similarly, second-hand properties saw a significant price increase of 7.3% compared to the same period last year. This represents the highest growth in second-hand property prices since the summer of 2022.
Demand continues to outstrip supply
The surge in housing prices is largely driven by a supply-demand imbalance. “The demand for purchasing remains intense, with 14% of the Spanish population currently seeking to buy property, up from 12% in 2021,” explains María Matos, Director of Studies at Fotocasa.
Matos also anticipates that demand will remain strong throughout the year, buoyed by favourable labour market conditions and steady household income levels. “As demand continues to rise and supply remains limited, it’s only logical that prices will keep increasing,” she notes.
This trend is particularly pronounced in major cities and coastal areas, where demand is high due to migration and interest from foreign buyers. These regions, including large capitals and tourist hotspots, are expected to see the sharpest price increases in the coming months.
Quarterly price growth also on the rise
Compared to the first quarter of 2024, housing prices increased by 3.6%—the highest quarterly growth since 2015. Second-hand properties experienced a 3.7% rise, while new builds saw a more moderate increase of 2.7%, slightly down from the first quarter.
Regional price increases led by Navarra
Housing prices rose across all regions in Spain during the second quarter. Navarra led the way with a 10.3% increase, followed by Aragón with 9.9% and Andalucía with 9.5%. Other regions that saw significant increases include Ceuta (9.5%), Cantabria, Valencia, and La Rioja (all at 8.6%).
At the lower end of the spectrum, Castilla-La Mancha saw a 5.3% rise, while the Balearic Islands and Extremadura recorded a 6.2% increase in both regions.