Economic Growth and its Impact

Spain’s economy continues to demonstrate resilience, which is positively impacting the real estate market. The national economy is expected to grow by 2.8% in 2025, according to BBVA Research , while CBRE forecasts GDP growth of 2.6% for the year. For comparison, Aberdeen projects Eurozone GDP growth at 0.6% in 2025. This economic uplift is supporting the dynamism within the real estate sector.  

Housing Sales: Trends and Forecasts

The Spanish housing sales market is active, though forecasts vary slightly. BBVA Research projects a 9.0% growth in housing sales for 2025, following an 11.7% increase in 2024. Data from Fotocasa for March 2025 showed 62,808 transactions, indicating a strong start to the year. Meanwhile, CaixaBank Research anticipates around 650,000 property sales in 2025, a decrease from 716,183 sales in 2024 but a return to 2022 levels. This discrepancy in sales forecasts may suggest some market uncertainty, possibly linked to new regulations or shifts in foreign buyer sentiment.  

Foreign buyers continue to play a significant role, accounting for 14.1% of all sales in the first quarter of 2025, according to Fotocasa. Buyers from the UK, Germany, the Netherlands, Belgium, and France make up 48.5% of all non-resident foreign purchases. This demand, particularly in coastal regions, is creating additional pressure on prices.  

Housing Price Dynamics

Housing prices in Spain are on an upward trend. BBVA Research expects prices to increase by 7.3% in 2025 , CBRE forecasts a 5.3% rise , and CaixaBank Research anticipates nominal growth of 4%, outpacing inflation. According to Fotocasa, the average price per square meter in May 2025 was €2,635, a 14.8% increase year-on-year. The portal Idealista noted a 7.5% price increase in the first quarter of 2025, with some capitals seeing rises of over 10%.  

Market Supply and Building Permits

A key challenge remains the insufficient supply of housing, especially new builds. BBVA Research forecasts a 16% growth in building permits for 2025, though the overall level remains low due to labor shortages and delays in land development. Data from the Ministry of Housing showed a 16.48% increase in permits from January to October 2024 compared to the same period the previous year.  

Mortgage Lending Conditions

Improving mortgage lending conditions are helping to activate the market. The 12-month Euribor rate in May 2025 stood at 2.081%, lower than in April. The European Central Bank reduced rates to 3% in 2024, with further decreases expected in 2025, which should improve mortgage affordability. Mortgage valuations increased by 15.23% in the first half of 2024 compared to the same period in 2023 , and the first quarter of 2025 ended with a 15% increase in mortgage operations compared to 2024 (Fotocasa ).  

Investment Attractiveness

Investment interest in Spanish real estate remains high. According to JLL, investment in the “Living” (residential) sector in Spain could exceed €4.35 billion in 2025, a 51% increase compared to 2024. Retail was also a popular sector for investors in the first quarter of 2025.  

Key Challenges

Despite positive trends, the market faces serious challenges. Housing affordability remains the main problem , and supply, particularly of new builds, is not keeping pace with demand. This imbalance is a key driver of price growth and governmental initiatives for tax reforms.  

Spain’s real estate market in May-June 2025 shows significant activity, supported by economic growth and favorable lending conditions. However, discrepancies in sales forecasts and persistent problems with housing affordability and insufficient supply indicate a complex and multifaceted market situation that requires careful monitoring in the coming months. Sources and related content