Pricey property: Experts predict house prices in Spain will skyrocket in 2025
Spain’s property market is experiencing a perfect storm of price increases and rental shortages
As the year draws to a close, many investors and prospective home buyers are wondering what the future holds for the Spanish housing market. With prices already at an all-time high, it's hard to imagine things going up any more. But, according to experts, that's exactly what's likely to happen in 2025.
The housing crisis has had a profound impact on 2024: purchase prices have increased by 9.5% year-on-year and, while the number of properties available for rent as a primary residence has decreased by 5%, tourist apartments have continued to proliferate.
This all too familiar supply versus demand problem is starkly reflected in the numbers. According to Spain’s Ministry of Housing, today, the average cost per square metre of residential property is just 180 euros below the peaks reached in 2008, when this country and the rest of the world were in the last throes of the real estate boom.
Economist and real estate expert Pau Antó has sounded the alarm, warning that the Spanish market is “inflated” and that the cost of living is becoming unaffordable.
“The Spanish market is inflated, as is the shopping basket in Spain and as are many other things in Spain, I think there is a very big problem with the cost of living in general,” the expert began by explaining.
Mr Antó and many other industry insiders believe that all of the available data indicates that property prices will continue to rise in 2025, driven by a shortage of rental housing and market regulation that's having unintended consequences.
It doesn’t take a property specialist to understand that a lack of supply will push up prices, but the Spanish government’s solution is something of a double-edged sword. On the one hand, the authorities are desperately trying to regulate the rental market to ensure enough housing for long-term residents rather than tourists. But on the other, these regulations themselves can cause supply problems if landlords refuse to comply and decide against renting their properties.
With all of this in mind, the real estate portal pisos.com is predicting that prices will continue to rise by more than 10% next year, with rents also increasing. Buying a property will be 12.1% more expensive in 2025 than this year, with prices expected to rise by 14.4%.
The biggest price hikes are likely to be in areas of high demand, such as large cities and tourist areas, where there is a significant imbalance between supply and demand.
As the director of studies at pisos.com, Ferran Font, points out, “This tension cannot be translated in any other way than in an increase in prices.”
Image: Freepik
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