The Spanish housing market has started the year 2025 with an unprecedented peak. As many as 183,140 homes were sold in the first quarter , the highest number since 2007. That's a 17% increase over last year, according to figures from the Spanish statistics office INE. But what does this upturn mean for buyers, investors and first-time buyers?

Why are so many people buying homes in Spain now?

There are two main reasons why so many people are striking now:

• Low interest rates: Mortgages are more attractive right now than they have been in a long time. Banks are offering competitive rates, making it easier for buyers to borrow.
• Fear of price increases: Many people want to buy now, before prices rise even further. This is creating a kind of "rush" on the market.

According to María Matos of housing platform Fotocasa, confidence among buyers has increased. "People who previously hesitated due to high interest rates are now seizing their chance. If this continues, 2025 will be the best sales year since the financial crisis."

New construction or existing homes?

Most homes sold are existing homes: 77% of all transactions. New construction accounts for 23% of the market. Despite the number of building permits rising (127,000 by 2024, the highest since 2008), the supply of new homes lags behind demand.

This is driving up prices, both for new construction and existing homes. So buyers have to decide quickly if they want to get a good deal.

Where in Spain is buying the most?

Four regions stand out:

• Andalusia
• Catalonia
• Valencia
• Madrid

Together they account for 63% of all home sales. Especially in cities such as Málaga, Barcelona and Madrid, prices are rising rapidly due to scarcity and high demand.

Regions such as Navarre and Aragon are also showing notable price increases, partly due to improved infrastructure and increased foreign interest.

Who actually buys these houses?

The profile of the typical buyer is remarkably uniform:

• Predominantly male
• Over 40 years of age
• A stable income of €2,500 or more per month

Only 20% of buyers come from lower income groups. Thus, it is still difficult for first-time buyers, young families and migrants to obtain housing - especially in urban areas. As a result, the gap in the housing market continues to grow.

Foreign buyers and investors play major role

Since 2007, the share of purchases by companies has doubled to 12.4%. Many of these properties are used for tourist rentals, investments or speculation. The British, Germans and French remain particularly active in the Spanish market, with a preference for coastal resorts and islands such as the Balearic and Canary Islands.

House prices continue to rise

Price increases are impressive:

• New homes: +9.8% (2024)
• Existing homes: +7.9%

An average increase of 6% is expected for 2025. The largest increases are expected in popular coastal regions, where supply and demand are further out of balance.

Conclusion: opportunities and challenges

The Spanish real estate market in 2025 offers plenty of opportunities for those who are already wealthy or looking to invest. At the same time, the challenge is growing for first-time buyers and those with lower incomes. The market is dynamic, but also fickle.

Are you planning to buy in Spain? Then this is the time to get good advice, because developments are happening fast.