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SPAIN’s housing boom is not slowing down. According to a research report by a major real estate agency, property prices in the country are expected to increase by more than 7% between 2025 and 2050.
According to Barcelona-based company Donpiso, the average value of a home is set to tip over €1,900 per square metre for the very first time – with the increase driven by moderate interest rates, strong demand and a limited supply of new houses.
The growth is even stronger in major cities such as Madrid or Barcelona, with average property prices in the most desirable urban areas expected to exceed €3,900 per square metre this year.
Many residents are also looking for homes in the suburbs or mid-sized cities near large metropolitan areas. They want to save money by buying away from expensive city centers.
In a sign of increased demand, Donpiso forecasts over 800,000 property transactions in 2025 – representing a near 25% rise compared to the 641,919 deals recorded last year.
The steep growth has led some academics to argue that Spain is in the midst of a housing bubble set to burst at any minute – but higher-ups at Donpiso are not so sure.
READ MORE : Bank of Spain warns of housing bubble with overvalued properties up to 8,5%
According to Emilian Bermúdes, the company’s deputy general manager, the rise in property prices is positive, driven by a solid labour market and improving financial conditions – such as lower interest rates which allow buyers to access affordable mortgages.
“We do not foresee a boom,” she said. “Rather, we see a year with stable growth and a particular focus on urban areas that are best connected.”
The housing market in Spain has soared ever since the Covid-19 epidemic, driven by international clients, and investors who view property as a secure investment.
But the increase has left some angry, with many locals in large cities across Spain complaining that the spiralling cost of housing – whether buying or renting – has forced them to abandon the city centres they once called home.
Some blame the increase in short term holiday rentals (such as those on Airbnb) for driving up housing prices.
Earlier this year, the Bank of Spain warned that steep rises in property prices are being pumped up by overvaluation – but laid the blame of price spikes at the feet of the country’s housing shortage.
Daniel Perez said that the lack of housing supply is causing house price increases, but overvaluation still remains moderate.
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