EXPLAINER – Why the house price in Spain is rising twice as high as EU average

In the first quarter of 2025, the price of a house in Spain increased twice as quickly as the average for the European Union.

Eurostat data shows that Spanish prices increased by 12.3%, or more than double the EU average of 5.7% in the first three months of the year.

Portugal (16.3%), Bulgaria (15.1%) and Croatia (13.1%) surpassed Spain in real estate price hikes with ‘holiday homes’ said to be a factor.

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Raymond Torres is the economist at the Funcas think-tank in Madrid.

The Language of Speaking El MundoHe said: “Many homes have been converted from primary residences to holiday homes in areas that are in high demand.”

Torres claims that population growth is also a factor in price increases.

He said that “population growth, and the creation new households due to immigration, has led an increase in demand.”

“Supply is not sufficient to satisfy the high demand, causing an increase in price.”

Francisco Iñareta, spokesman for property portal Idealista told El Mundo It is clear that several factors have contributed to the current price situation.

The rise in price is due to the lack of housing and the current crisis on the rental market, as well as the falling interest rates.

Second-hand housing has not been able to respond to a gigantic demand that does not stop growing,” added Iñareta.

Raymond Torres commented about the fall in interest rates ‘Making mortgages more affordable and increasing demand in some way’.

“But as supply does not react quickly to the increase in demand – and in Spain with long delays- the benefit of interest rate cuts simply put up prices,” he observed.

Torres added, “Another driver of price is legal uncertainty. Real estate awards are often affected by legal disputes and can be slowed or stopped.”

In France, however, prices of property rose just 0.6% between the EU during the first quarter.

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