The housing situation in Spain continues to make headlines and spark debate. The price of the market keeps following an upward trend that shows no signs of stopping any time soon. According to the Real Estate Sector Trends report by Sociedad de Tasación, house prices rose by 7.5% in the first half of the year, and the outlook is that this trend will continue. So, is it time to sell or is there still potential for higher returns? Leopoldo Abadía, economist and writer, analyses the current state of the sector for Urbanitae, breaking down the implications of the real estate market and what to expect from housing prices in the medium term.
The context of real estate investment in Spain
The Spanish real estate sector is currently under pressure due to a limited supply and very strong demand, which drives up property prices and makes housing less accessible for a large part of the population. However, buying appetite has not slowed down: during the first half of 2025, the INE reports that property transactions grew by 18% compared to the same period last year, reaching a total of 357,533 deals. Meanwhile, prices are now at the same level as they were 20 years ago, according to Fotocasa’s Real Estate Index. In 2005, the price per square metre was €2,405. Ten years later, in 2015, it had dropped significantly (during the economic crisis) to €1,629/m². Just before the pandemic, it rose to €1,841/m² and has since increased again, reaching €2,405/m² in January 2025.
Although prices are high—similar to those seen in the years leading up to the housing crisis—there is no indication that returns will suffer in the medium term. Leopoldo Abadía reflects on the comparison: “It’s impossible to repeat the 2008 crisis because the conditions back then were very different. Put plainly, people were trading rubbish. And that rubbish blew up when everyone realised what it really was. Now, conditions are stricter and banks are well aware not to repeat the same mistake.”
Is now the time to sell?
With the market at record highs, one might think it’s time to cash in and profit from their property. However, according to Leopoldo Abadía, this upward trend still has room to grow. He explains with a practical example: “If I have a house and a lot of people want it, I can sell it for a good price. And the more people want it, the higher the price I can ask for—as long as someone is willing to pay it.”
There are several factors behind this continued growth. Firstly, the cost of mortgages is at its lowest in years, encouraging demand with better conditions. Additionally, the lack of new housing also pushes prices up, as supply fails to meet demand. This issue has gained international attention, with the IMF urging the Spanish government to take action to improve housing supply. Still, Abadía concludes, “as long as there is demand, there will be a market.”
The Spanish paradox
While some countries are showing signs of a housing market slowdown, here in Spain, demand, prices and—most importantly—attractiveness for international investors remain strong. This is mainly due to comparisons with other European countries in terms of conditions and returns. Spain leads with €14 billion invested in 2024, ahead of Germany (€9.8 billion), France (€7.8 billion), and Italy (€2.1 billion), according to the European Investors Survey 2025 by CBRE. At the same time, Spain is a strategic place to buy, driven by tourism and high demand in cities like Madrid, Barcelona, or Málaga.
“These cities have been more influenced by foreign investors than the rest of the country,” says Leopoldo Abadía. “Normally, foreign investors now have greater purchasing power than domestic ones, which turns this into a game played under the same rules but where some players have better cards.”
Opportunities for investors in the medium and long term
As we’ve seen, buying real estate will remain profitable in the medium term. “It continues to be a safe haven in these times, and Spanish investors perceive it that way, which makes it even more secure,” the economist confirms.
However, traditional real estate investment still presents high entry barriers, due to the significant upfront capital needed to buy a home.
In this context, new formulas with attractive returns have emerged to facilitate access to the real estate market without having to own a property to rent or sell, allowing investors to diversify their portfolios.
For example, real estate crowdfunding platforms like Urbanitae allow both retail and non-retail investors to finance real estate projects through debt, capital gains or rental income—and, from September 2025, through direct investment in properties, with Urbanitae Direct Investments.
This new business unit will help investors purchase properties through the platform, whether new or resale, with an end-to-end advisory process provided by Urbanitae’s real estate experts.
