According to CaixaBank Research, by the end of the year, housing prices will rise by more than 10% in 32% of cities with more than 25,000 inhabitants. Only 1% of locations will see a decline in prices.
Housing Prices Continue to Rise
Housing prices in Spain show no signs of slowing down. Economic and real estate experts agree that strong demand, improving economic conditions, and declining interest rates are driving price increases. As a result, property prices in many parts of the country could rise by double digits in 2025.
At least, that is the forecast from CaixaBank Research, whose latest market update predicts more sales transactions and even greater price increases than previously expected.
The nationwide price increase is expected to be:
- 5.9% (according to Spain’s Ministry of Housing and Urban Agenda - MIVAU).
- 7.2% (according to the National Institute of Statistics - INE).
However, in 32% of cities, price growth is expected to exceed 10%.
Which Cities Will See the Largest Price Increases?
According to Spain’s Ministry of Housing, in 27% of cities with more than 25,000 residents, property prices had already increased by more than 10% in summer 2024 compared to the previous year.
- 36% of municipalities experienced price growth between 5% and 10%.
- 27% saw increases of 0% to 5%.
- Only 10% recorded a decline in prices (with 7% dropping less than 10%, and 3% seeing a drop of more than 10%).
CaixaBank Research now forecasts that by the end of 2025:
- 32% of cities will see price increases above 10%.
- 46% of cities will experience price growth between 5% and 10% (up from 36% in summer 2024).
- 78% of cities will see property price increases above 5%.
- Only 1% of cities will experience price declines (limited to a 5% drop or less).
Which Areas Will See the Highest Price Increases?
According to CaixaBank Research, the most significant price growth will occur in:
- Large cities with strong economies and job markets.
- Tourist regions.
- Major metropolitan areas and suburban zones surrounding big cities.
These locations suffer from a high demand but limited housing supply, leading to continued price increases.
Housing Affordability Worsens
According to CaixaBank Research's Real Estate Index, the Spanish housing market will continue to expand in 2025, with both prices and transaction volumes rising.
Experts at CaixaBank Research believe that the main factors driving housing demand will remain unchanged:
- The European Central Bank (ECB) will continue lowering interest rates.
- Household incomes will increase.
- Spain’s population is expected to keep growing.
However, the rapid rise in prices will make housing even less affordable. In 2025:
- The average Spanish household will need 7.5 years of full income to buy a typical home.
- This is higher than in 2024 (7.2 years).
- This figure is similar to 2022 levels but still lower than the 2007 peak of 9.4 years.
Conclusion
In 2025, housing prices in Spain will continue to rise significantly, especially in major cities and tourist areas. As a result, affordability will decline, with property prices growing faster than household incomes.
