Property Market Outlook for Spain in 2025
As we move past a year characterized by heightened property prices and steep interest rates, potential buyers are eager to discover what 2025 holds for the Spanish real estate market. Will there be a relief for those looking to enter the market, or can we expect a continued escalation in property values? Here’s the perspective from industry experts.
In recent times, both the rental and purchase sectors in Spain have been hot topics due to the unrelenting increase in property prices, despite enduring inflation and climbing interest rates. As we approach 2025, the market appears poised for ongoing demand, with prices expected to rise, albeit more gradually than in prior years.
Current market analyses, including those from prominent banks and real estate authorities, suggest that due to the enduring high demand and limited supply, property prices are likely to continue their upward trajectory into the following year. A report by leading property firm Solvia, reviewed by top housing platform Idealista, anticipates a slight dip in property sales this year but a rebound in 2025, with an estimated price growth of around 3% for both years.
Earlier in 2024, Solvia noted a modest downturn in total transactions alongside a modest uptick in property prices and a significant surge in rental costs. This trend is expected to persist through the remainder of the year and into 2025.
Juan Ramón Prieto, Director of Operations at Solvia, comments on the market dynamics: “The ongoing scarcity of available properties is continuously straining the market. Coupled with steady demand, this is likely to maintain the upward price momentum.” This view aligns with projections from one of Spain’s major banks, Bankinter, which anticipates an overall price increase of 6% in 2024 and 4% in 2025, driven primarily by a “supply shortage in key areas such as main cities, the Mediterranean coast, and islands.”
Further supporting these forecasts, Caixabank’s research division projects a 2.8% rise in property prices, slightly higher than earlier predictions, influenced by changing interest rates. The forecast suggests that the Euribor rate will likely drop to about 2.65% by late 2024 and further decrease to approximately 2.1% during 2025, potentially boosting demand.
Experts predict that while prices will continue to climb, the rate of increase might see a moderate slowdown compared to 2024. Estimates suggest a rise between 2.8% and 4% overall. Property specialists AZ Hogar, in their recent forecast analysis, suggest that the real estate market in 2025 may experience a stabilization of prices, with minor increases in major cities and possible declines in less sought-after areas.
Key factors such as inflation, interest rates, and supply dynamics, alongside economic and political influences, will continue to shape the trajectory of property prices. Despite the high interest rates, 2024 witnessed no significant decrease in house prices, highlighting sustained demand. Spain’s chronic housing construction shortfall remains a fundamental issue, fueling supply-side constraints.
AZ Hogar further predicts that new housing developments in 2025 are unlikely to satisfy the burgeoning demand, potentially driving prices upward, particularly in highly coveted urban locales. Despite a slow pace in new housing construction compared to previous years, the market dynamics favor sellers, with demand significantly outstripping supply, thus perpetuating price increases.
At SGM Abogados in Benijofar, we continue to monitor these trends closely, providing our clients with expert guidance tailored to navigate the evolving landscape of Spain’s real estate market.
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