The Housing Market Regains Cruise Speed
Last Updated on 19 March 2025 by Urbanitae
The real estate sector in Spain is undergoing a remarkable transformation, significantly contrasting with the stagnation experienced in 2023. During 2024, the market has witnessed a resurgence, driven by an increase in per capita income, growing demand, and considerably more favorable mortgage conditions, leading to a notable rise in housing prices—levels of growth not seen in decades.
Official figures from the National Statistics Institute (INE) indicate that the Housing Price Index (HPI) has recorded a year-on-year increase of 8.4%, the highest rise since 2007, marking a significant shift in market dynamics driven by strong demand despite a limited supply. At the same time, projections for 2025 suggest that this upward cycle will solidify, opening numerous investment opportunities in real estate, in an environment where platforms like Urbanitae are revolutionizing access to these opportunities through real estate crowdfunding. This allows both individual and professional investors to diversify their portfolios in a constantly evolving market.
Trend Shift: From Cooling in 2023 to Acceleration in 2024
This report from CaixaBank Research details how, during 2023, interest rate hikes acted as a brake on the dynamism of the real estate market, impacting both investment and transactional activity. During that period, the rise in rates functioned as a containment mechanism that limited buyers’ and investors’ ability to access financing under favorable conditions, reducing transaction volumes and creating a climate of caution.
However, 2024 marked a radical shift in the landscape, supported by the moderation of interest rates and renewed confidence in the sector. This structural change, reflected in CaixaBank Research’s analysis, has made market conditions significantly more accessible, facilitating the entry of new investors and reactivating latent demand. The combination of a more lenient monetary policy and growing optimism among market players has helped unlock potential that had been restrained the previous year, laying the groundwork for sustained recovery and a new growth cycle in the real estate sector.
Demand Dynamics and Its Impact on Housing Prices
According to data from the banking institution, strong demand—an essential driver of this sector resurgence—can be explained by a combination of factors, including an improvement in household purchasing power, demographic growth, and notably more accessible credit conditions. These elements have led to continuous upward pressure on housing prices, despite an insufficient supply to meet all needs.
In this context, José María Gómez-Acebo, Head of Institutional Clients at Urbanitae, states that “housing should be understood as a financial asset; ignoring this reality can lead to policy failures in improving access to it. When housing is linked to investment, part of society associates it with speculation, but it is more useful to compare it with infrastructure like roads. That is, investment in housing should be approached from a development perspective, not just short-term profitability.”
Forecasts for 2025: Supply, Demand, and Growth Projections
Looking ahead to 2025, CaixaBank Research forecasts that the upward cycle that began in 2024 will consolidate sustainably, opening up a range of opportunities for real estate investment. As supply gradually adjusts, driven by new construction projects and the dynamization of secondary markets, demand—supported by economic strength and growing investor confidence—will continue to rise. This will create an environment where prices not only maintain their upward trend but could experience further increases, reinforcing the idea of a market in full recovery and expansion.
Accessibility and Future Challenges in the Real Estate Market
Despite the optimistic signals and strong momentum observed, the real estate market faces significant challenges in terms of accessibility and the balance between supply and demand. The rapid appreciation of prices, while an investment opportunity, also raises the challenge of ensuring that a significant portion of the population can access decent housing.
“The bulk of housing demand should be covered by the state through public housing, leaving private initiatives to develop their projects without subsidies.” However, he warns that “a model based exclusively on public housing would take decades and require substantial budgetary efforts; it is unrealistic to think that the state can build more than a small fraction of the necessary housing.” Additionally, in his view, the key lies in combining both models without distorting the market, as “private initiatives will only participate if the investment is profitable and if no additional burdens are imposed that affect their viability,” Gómez-Acebo explains.
At the same time, the Urbanitae expert emphasizes the importance of properly financing public housing without negatively impacting the private sector: “Let’s finance public housing through taxes, but not shift these costs onto free-market housing, because we would end up with neither.” This statement highlights the need for a balanced regulatory framework that allows private investment to continue driving the market without negatively affecting housing accessibility.
Real Estate Crowdfunding and Urbanitae’s Role
Amid this revitalization and its challenges, a disruptive trend is emerging that is revolutionizing the way people invest in the sector: real estate crowdfunding. This model enables small and medium-sized investors to participate in real estate projects with modest contributions, democratizing access to a market that traditionally required large capital investments.
Urbanitae is at the forefront of this movement, offering an innovative platform that facilitates investment in attractive real estate developments. The ability of crowdfunding to inject liquidity and support the financing of new projects is essential in an environment where traditional financing may be restrictive. By integrating this alternative, Urbanitae not only expands investment avenues but also contributes to market dynamization, generating new real estate opportunities and complementing traditional financing mechanisms.
