Lorraine Williamson
The 2025 Spanish property market has seen its busiest quarter since 2007, with 183,140 homes sold in the first three months of 2025. Data from the National Institute of Statistics (INE) show a 17% rise in transactions compared to the same period last year.
This sharp increase reflects shifting buyer sentiment. Low interest rates are driving demand, while a growing fear of further price increases is prompting many to act now rather than wait.
Interest rates and buyer anxiety fuel market surge
According to housing analyst María Matos from Fotocasa, many who delayed purchases due to past high rates are now entering the market. If this pace continues, 2025 could set a new post-financial crisis record for home sales.
The sense of urgency among buyers—what some call a “rush effect”—is contributing to market momentum. As prices continue to rise, hesitation appears riskier to many prospective homeowners.
Existing homes dominate transactions
Of the total sales, 77% involved existing properties. That equates to 140,481 units. Meanwhile, 23% of sales (42,659 homes) were newly built properties. This balance highlights the limited availability of new housing in some areas.
Although the number of construction permits rose sharply in 2024 to 127,000—marking a peak not seen since 2008—supply is still falling short of demand.
Rising role of investment firms in housing
Not all buyers are individuals or families seeking a home to live in. According to Professor Sergio Nasarre, business purchases now account for 12.4% of transactions, twice the level seen in 2007. Investment firms are increasingly active, often acquiring homes for rental income or speculation.
These purchases influence pricing and availability, especially in cities where the rental market is already competitive.
Regional disparities shape market dynamics
Certain areas are attracting the majority of activity. Andalucia, Catalonia, the Valencia region, and Madrid accounted for 63% of all sales. Demand in these regions continues to outpace supply, leading to rising prices and more competitive bidding environments.
Affordability a challenge for younger buyers
Despite the surge in sales, access to homeownership remains uneven. Most buyers are men over 40 with a monthly income exceeding €2,500. Only 20% of purchases were made by lower-income groups.
This trend leaves younger buyers, migrant families, and financially unsupported households facing significant barriers. With homeownership increasingly out of reach for many, concerns around affordability and equality are growing.
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