Sharp rise in housing prices in the capital
Buying your own apartment in Spain in 2025 has become one of the most difficult tasks for most families. Over the past decades, real estate prices have multiplied several times, especially in major cities. In Madrid, according to the National Institute of Statistics, in the second quarter of this year, prices for free-market housing increased by 12.7% compared to the same period last year. This is the highest annual growth since 2007. For many residents of the capital, purchasing an apartment has become an almost unattainable goal.
Comparison with the past: how the market has changed
The situation with rising property prices is not unique to Spain, but in Madrid the problem is felt particularly acutely. In the 1990s, buying an apartment was a realistic option for the middle class. Now, however, the gap between wage growth and housing prices has only widened. As a result, becoming a homeowner now requires significantly more time and financial effort.
A real-life example: Chamberí district
Lawyer Andrés Millán has clearly demonstrated how apartment prices have changed in one of Madrid’s prestigious neighborhoods — Chamberí. In 1997, a four-bedroom apartment cost around 15 million pesetas, which was equivalent to about 90,000 euros. At that time, the average annual salary was 3.8 million pesetas (23,000 euros), so buying a home took less than four years of work. In 2025, a similar apartment is valued at over 700,000 euros. With today’s average salary of 31,800 euros, it would take more than 30 years to purchase such a property.
Financial burden and taxes
The expert notes that these calculations are based on the average income, which for many workers is even lower. Taxes are added to the apartment’s price — for a property worth 700,000 euros, one would have to pay around 80,000 euros more in various fees. In addition, the income tax in Spain has not been adjusted for over ten years, which further increases the financial pressure on buyers. To save the required amount, one would effectively need to earn over a million euros.
Causes and possible solutions
According to Millán, the situation in the real estate market stems from several factors at once. As a measure to improve housing affordability, he proposes eliminating taxes on the purchase of a first home. However, he notes that authorities are in no hurry to implement such initiatives, since maintaining the current situation is beneficial to the state.
