Dear Investors,

As we progress through April 2025, Spain's property market continues to exhibit robust growth, presenting both opportunities and challenges for investors. Here is an overview of the current landscape:

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Market Overview: Prices Surge Amid Supply Shortages

Spain's housing market is experiencing significant upward pressure on prices. According to CaixaBank Research, housing prices are expected to rise by over 10% in 32% of cities with populations exceeding 25,000 by the end of 2025. Nationwide, prices are forecasted to increase between 5.9% and 7.2%, with the most substantial growth anticipated in tourist regions and major metropolitan areas.

This surge is partly due to a 15% year-on-year decline in housing supply during the final quarter of 2024, marking the steepest drop on record. Cities like Zaragoza, A Coruña, and Oviedo have seen available housing stock plummet by 38-40%, intensifying competition and driving prices higher.

 

Investment Hotspots: Emerging Regions to Watch

While traditional hotspots like Madrid, Barcelona, and the Balearic Islands remain attractive, investors are increasingly turning to emerging regions. Galicia, Asturias, and Cantabria in northwestern Spain are gaining popularity among Britons and other Europeans seeking cooler climates, lower property prices, and a more tranquil lifestyle. Cities such as Vigo, Pontevedra, and coastal towns near A Coruña offer properties ranging from under €70,000 for rural homes to over €1.5 million for upscale penthouses.

 

Regulatory Landscape: Tourist License Crackdowns Intensify

Local governments are tightening regulations on short-term rentals. In Barcelona, plans are underway to end short-term rentals by 2028 to alleviate housing market pressures. Similarly, the Balearic Islands have introduced severe fines for antisocial behaviour from tourists, aligning penalties for residents and visitors alike.

 

These measures aim to address the housing crisis exacerbated by the proliferation of short-term rentals, particularly in tourist-heavy areas. Investors should be aware of these developments, as they could impact rental yields and property values in affected locales.

 

Sustainability and Smart Homes: Future-Proofing Investments

Sustainability is becoming a key consideration in property investments. New government policies and EU regulations are encouraging the incorporation of green technologies such as solar panels, energy-efficient insulation, and water-saving systems in new constructions. Additionally, retrofitting older buildings to meet environmental standards is gaining momentum. Properties with high energy ratings are becoming more attractive to both domestic and international buyers.

 

Moreover, the integration of smart technology in residential properties is increasingly in demand. Features like remote-controlled lighting, advanced security systems, and energy management tools are becoming standard in new developments, offering convenience, security, and efficiency to tech-savvy buyers.

 

Investor Takeaways

• High Demand, Low Supply: The ongoing supply shortage is likely to sustain upward pressure on property prices, particularly in urban centres and tourist destinations.

• Regulatory Risks: Stricter regulations on short-term rentals could affect rental income potential in certain areas.

• Emerging Markets: Regions like Galicia and Asturias present opportunities for investors seeking more affordable properties with growth potential.

• Sustainability Focus: Investing in energy-efficient and smart homes may offer long-term value as demand for sustainable living increases.

 

 

Best regards,

The SPIB Team

 

Sources:

• https://www.spanishpropertyinsight.com/2025/01/23/spanish-housing-market-sees-record-supply-decline-in-2024

• https://www.theolivepress.es/spain-news/2025/01/10/real-estate-trends-in-spain-for-2025-what-to-expect/

• https://www.bravosestate.com/en/article/2025-housing-market-forecast​