Strong start for Spain's housing market in 2025

Home sales surge by 11% in January, marking the best start to the year since 2008

Despite ongoing challenges in accessing housing, Spain's real estate market has kicked off 2025 with significant momentum. January saw an impressive 11% increase in home sales compared to the same month last year, marking the best start to the year since 2008, with a total of 60,650 properties sold. This represents the first time in 17 years that more than 60,000 homes have been sold in January, a figure that reflects a continued recovery in the market after the pandemic’s initial setbacks.

While the surge in activity is undeniable, it was a slightly more moderate pace than the explosive growth seen in late 2024. For instance, December 2024 witnessed a year-on-year jump of nearly 38%, while October saw an even higher increase of 51%. The January figure still stands out, with 6,015 more sales compared to the same time in 2024, showing sustained market resilience.

This year’s results follow the trend set in the latter half of 2024, when the European Central Bank's rate cuts had a clear impact on the housing sector. Lower interest rates made mortgages more affordable, sparking increased demand for property. That said, this surge in sales has been tempered by the persistent challenge of high property prices, driven by limited supply and strong demand.

The rise in home sales is consistent across both new and second-hand homes, with new builds seeing a 30.9% jump from last year. However, second-hand properties still dominate the market, making up the majority of transactions. In total, 93% of homes sold were unsubsidized, indicating the ongoing importance of the private sector in Spain’s housing market.

Despite the positive figures, housing affordability remains a concern, with property costs continuing to rise in some areas due to a shortage of available homes, which is driving up prices. Regional variations are also evident, with most regions seeing year-on-year growth. Notably, Cantabria experienced a slight decline after a strong 2024, while areas like La Rioja, the Canary Islands, and Asturias saw significant increases, with La Rioja alone recording a 24.4% rise in sales.

In short, the Spanish housing market is off to a strong start in 2025. Though the pace may have slowed from the frenetic growth of late 2024, the combination of improved mortgage conditions and strong demand has set the stage for a promising year ahead.

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