Lorraine Williamson
Spain’s housing market has surged into new territory, with prices rising at a pace not seen since the final years of the pre-crash boom. Fresh data from the national statistics agency INE shows an annual increase of 12.8% in the third quarter of 2025 — a jump that underscores the extraordinary pressure on a market where demand continues to outstrip supply.
The figures mark 42 consecutive quarters of growth, a run that began in 2015 and has accelerated in recent years. The housing index now sits well above its pre-2007 peak, reflecting an era shaped by population shifts, limited construction and sustained investment interest.
Resale homes fuel the momentum
The sharpest increases come from the resale market, long considered the motor of Spain’s property cycle. INE reports a year-on-year rise of 13.4%, the strongest increase ever recorded in this category. New-build prices also climbed, though at a slower 9.7%, hindered by delays in planning approvals, labour shortages and rising construction costs.
Although new developments remain scarce, what does reach the market is priced higher than ever. The index for newly built homes has more than doubled since 2015, a sign of how Spain’s construction pipeline is struggling to keep pace with demand.
A decade of climbing prices
With 2015 set as the base year (100), the housing price index has climbed beyond 183 points. In practical terms, the average home is 83% more expensive than it was ten years ago. That puts current values more than 20% above the peak reached just before the 2007 crash — a reminder of how far the pendulum has swung since the financial crisis reshaped Spain’s urban landscape.
Economists note that, unlike the bubble years, today’s growth is not driven by speculative buying. Instead, the pressures come from structural imbalance: too many buyers chasing too few homes.
Regional trends reveal uneven pressures
Every autonomous region recorded an annual increase, but the pace is uneven. Murcia posted the strongest rise at 15%, while Navarra, with 10.9%, was the most moderate — though still far from flat.
Quarterly shifts show more nuance. Some regions, including the Balearic Islands, Madrid, Catalonia, Castilla-La Mancha and the Basque Country, saw slight drops in new-build prices between summer and autumn. Even so, their year-on-year figures remain firmly positive, reinforcing the overarching national trend.
Demand remains high despite affordability strain
Property portal Fotocasa notes that supply shortages remain the defining feature of today’s market. Urban hubs and coastal provinces — where job growth, tourism and international interest converge — face the tightest conditions.
Low mortgage rates should, in theory, make buying more accessible. Yet households report little relief. Banks have tightened lending criteria, while soaring prices mean deposits must stretch much further. For younger buyers and middle-income families, the gap between wages and house prices is widening rather than narrowing.
Forecasts point to continued growth
BBVA Research expects the upward trajectory to continue into 2026. Its latest outlook suggests a rise of around 10% for 2025, easing to 7% the following year. The financial sector sees no immediate shift in the fundamentals: construction remains slow, demand is resilient, and international interest shows no sign of cooling.
What this means for Spain’s housing future
Spain enters 2026 with a property market still shaped by scarcity. Prices may rise at a slower pace, but the imbalance between supply and demand is unlikely to resolve quickly. Policymakers face growing pressure to accelerate affordable housing projects, streamline planning procedures and ease the path for younger buyers. Until then, the market’s upward march looks set to continue.
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