Housing prices rise 3.5% quarter-on-quarter and are 13% higher year on year

Spain’s housing market closed 2025 with strong upward momentum, as prices continued to rise across both major employment hubs and key coastal and tourist areas. According to the latest Tinsa IMIE Local Markets Q4 2025 report, the average price of new and resale property in Spain reached €2,091/m² — up 3.5% compared with the previous quarter and 13.1% higher than a year earlier. Even after adjusting for inflation, prices still show a solid 10% annual increase.

Overall, 2025 proved to be a notably dynamic year for the market. Average housing prices grew by 10.7% in nominal terms — nearly three times the growth recorded in 2024. Of Spain’s 52 provincial capitals, 20 registered annual price increases above 10%, with Madrid standing out in particular: property in the capital is now 20.9% more expensive than it was a year ago. Within the city, the Arganzuela district has surpassed €5,000/m² for the first time, joining traditionally premium areas such as Salamanca, Chamberí, Chamartín, Centro, Retiro and Moncloa-Aravaca.

Transaction activity has also remained high. The year is expected to close with around 550,000 housing sales, half of which were financed with mortgages according to notary data. However, the report notes signs of a gradual slowdown in the pace of growth, suggesting that demand may be approaching its peak levels.

Looking ahead to 2026, Tinsa anticipates a scenario of stabilisation rather than cooling. Residential demand is expected to remain strong, supported by household formation, resilient employment and the continued pass-through of previous interest rate reductions to mortgage costs. Benchmark interest rates are forecast to hold close to 2%, while price growth is expected to remain positive — potentially rising between 5% and 10% over the year.

Although housing prices are increasing faster than inflation — leading to a moderate rise in the effort required to purchase a home — affordability levels across Spain are still considered broadly reasonable, with mortgage payments representing an average of 34.5% of household disposable income.

Overall, the data suggests a Spanish property market that remains robust, particularly in economically active cities and sought-after coastal and tourist locations — a trend of particular relevance for regions such as Alicante and the wider Costa Blanca.