After several years of uncertainty and adjustments, 2025 is shaping up to be a dynamic period for real estate investment in Spain. Experts agree that the real estate sector will experience significant growth, primarily due to a combination of factors such as greater macroeconomic stability, the sector’s continued attractive returns, declining interest rates, and the appeal of segments such as living, hospitality, and retail, among others.
Living and hospitality sectors lead the way
According to the Real Estate Market Outlook 2025 report by CBRE, investment volume in Spain is expected to reach €16 billion this year, representing a 15% increase compared to the €14 billion recorded in the previous year, reinforcing the growth trajectory initiated in 2024.
- The living segment is expected to continue leading capital inflows, accounting for 30% to 35% of total investment in Spain and across Europe. Despite an expected issuance of 138,000 new construction permits, supply will still fall short of demand, leading to a 5.3% increase in housing prices. Meanwhile, property transactions are expected to decline by 2.3%, stabilizing at around 600,000 to 650,000 annual operations.
- The hospitality sector is projected to attract between 20% and 25% of total investment, benefiting from a 3.4% increase in the number of travelers and improvements in average daily rates (ADR) by 4.7% and revenue per available room (RevPAR) by 5%. Luxury assets, conversion projects, and mixed-use developments are expected to draw growing interest. Branded residences and serviced apartments are also emerging as attractive investment options in less traditional destinations.
- Retail, which saw a remarkable 121% increase in 2024, is expected to maintain its positive momentum and could represent up to 20% of total investment. CBRE forecasts a 3% growth in retail sales, driven by a recovery in private consumption and tourism. Consequently, rental demand will continue pushing prime rents upward, with an average 3% increase in key commercial locations.
- The office market in Madrid is expected to remain stable, with 550,000 m² of office space leased, while Barcelona could see a 20% increase in annual leasing activity. Investment will focus on high-quality assets and strategic locations, with the Midcaps segment gaining prominence. Additionally, conversion of office spaces into residential or hotel use, a trend that reached 250,000 m² in 2024, is expected to continue growing.
- The logistics sector remains on an upward trend, with over 2.5 million m² leased nationwide in 2024, reflecting a 23% year-over-year increase. CBRE anticipates continued stability in demand, while prime rents are expected to keep rising due to high demand and a limited supply of new space. With investment ranging between 10% and 15% in 2024, this sector will remain a key pillar of the real estate market in 2025.
In line with CBRE’s projections, Mikel Echavarren, Chairman and CEO of Colliers, predicts that in 2025, the real estate market will continue growing and diversifying, with investment increasing by 15% to 20%. Hospitality, industrial, and logistics sectors will remain key targets for institutional investment, as highlighted in El Economista.
Regarding the residential market, Colliers expects new housing developments to maintain a focus on quality and sustainability, with a limited supply continuing to push prices upward. Meanwhile, the decline in interest rates is expected to facilitate homeownership.
Residential real estate: A pillar of investment
Experts agree that the residential market will continue to be a fundamental pillar of real estate investment in Spain. According to Unión de Créditos Inmobiliarios (UCI), mortgage approvals are expected to increase by 10% in 2025, reaching approximately 400,000 transactions throughout the year.
This growth will depend on monetary policy trends and housing availability, further consolidating the sector’s recovery after years of instability. In addition to the European Central Bank (ECB) reducing interest rates—making credit more affordable, facilitating home purchases, and promoting new developments—other factors driving growth include the rise of the build-to-rent model, with greater emphasis on rental housing construction, and the adoption of industrialized and modular construction, which is emerging as a solution to the shortage of affordable housing.
Moreover, a greater diversification of foreign buyers is expected, with increased investment from France, Nordic countries, the U.S., and Latin America, although British and German investors will continue leading the market.
Housing prices on the rise
Regarding prices, while no sharp increases are expected, the lack of supply will continue to drive up prices. According to UCI, housing prices are projected to rise by 5% for purchases and up to 10% for rentals in 2025, particularly in major cities and coastal areas.
However, the shortage of affordable housing will remain a structural issue, affecting both buyers and renters, particularly young people and middle-income families. The sector will also need to adapt to new environmental regulations and advance toward more sustainable construction practices.
Additionally, a recent Bankinter report analyzing real estate market prospects for 2025 has raised its housing price forecasts, projecting an 8% increase in 2024 and a 5% increase in 2025. The report highlights that interest rate cuts, a strong labor market, and limited supply will further drive growth in the sector.
