The summer season of 2025 has proven to be a real test for Spanish property buyers. While most European countries saw a moderate increase in housing prices, Spain surged ahead with a figure that led many to question the reasons behind such a jump. In just three months, the cost per square meter in the country rose by 2.9%, nearly double the average growth rate for the eurozone and the entire European Union. Year-on-year, the situation is even more striking: up 12.8% compared to the same period last year. This ranks sixth among all EU countries—and, judging by the current trend, is far from the limit.
While buyers in other parts of Europe still had time to consider and negotiate, the Spanish market was literally boiling over. What’s driving this dynamic? Experts point to a combination of several factors: limited supply, high demand from foreign investors, and sustained interest in real estate along the coast. Together, these have created ideal conditions for rapid price growth—so sharp that even seasoned analysts were caught by surprise.
A European contrast
Looking at the situation more broadly, it’s clear that Spain is not the only country where housing prices are rising. However, the growth rate here is significantly higher than the EU average. For comparison, in the eurozone and across the European Union, housing prices rose by just 1.6% during the summer of 2025. In some countries, such as Finland, prices even fell—down 3.1% over the year. Against this backdrop, the surge in Spain appears especially striking.
The highest annual growth rates were seen in Hungary (21.1%), Portugal (17.7%), and Bulgaria (15.4%). While Spain didn’t top the list, it firmly secured a place in the top six, outpacing countries like the Czech Republic and Slovakia. Interestingly, in quarterly terms, Latvia, Slovakia, and Portugal showed the largest increases, but Spain still remained among the leaders.
Causes and effects
What’s driving the Spanish market upward? One of the key factors is a limited supply of new housing. Developers can’t keep up with demand, and bureaucratic delays along with rising construction material costs only exacerbate the problem. Added to this is the activity of foreign buyers, who see Spanish real estate as a reliable investment opportunity amid instability in other regions.
It is also important to consider domestic demand. After the pandemic, many Spaniards have reconsidered their housing preferences, favoring more spacious apartments and houses with terraces. This has added further pressure to the market, especially in popular tourist areas and large cities.
Geography of Growth
Housing price growth in Spain is uneven. The greatest frenzy is seen in coastal regions such as Costa del Sol and the Balearic Islands, as well as in major cities like Madrid and Barcelona. Here, demand consistently outpaces supply, and prices for premium real estate are hitting record highs. Meanwhile, some inland provinces have a less pronounced dynamic, but even there, the price per square meter continues to rise.
Interestingly, even against the backdrop of overall price increases, certain regions of Spain show their own particularities. For instance, the Valencian Community and Andalusia have seen an influx of buyers from other EU countries, which further heats up the market. At the same time, in Galicia and Asturias, price growth is more restrained, but European-wide trends are still making their mark.
Looking Ahead
Will the summer of 2026 mark the peak of Spain’s real estate market, or are new records still ahead? Experts are divided. Some believe the market is nearing overheating, while others are confident there’s still room for growth. One thing is clear—Spain is once again at the center of attention for European investors and analysts. The question is, how long can this momentum last before the risks of a potential bubble emerge.
