What's the state of the Spanish property market this autumn?

Property has become a controversial issue in Spain in the post-pandemic period. Whether it be skyrocketing rents or the government searching for ways to ban or tax non-resident foreigners from buying property, the Spanish real estate market has certainly earned headlines.

To take a wider view, in the first half of the year, Spanish property has continued to be big business. The market saw total investment volume of €7.3 billion, representing a year-on-year increase of 22 percent and 15 percent above the average for the decade, according to figures from commercial property company CBRE.

In very basic terms, the Spanish property market, whether for purchase or rent, seems to be going in one direction: upwards, in price terms at least. Demand is high and supply is low, making the market tricky for many.

That's not to say that there aren't some (admittedly small) signs of encouragement for people wanting to get on the property ladder in Spain, however.

READ ALSO: The towns in Spain where up to 87 percent of property buyers are foreign

Continued price rises and demand

Forecasts suggest that the direction of travel is unlikely to change heading to the second half of 2025.

House prices in Spain have now risen for 11 consecutive years, according to INE data, and increased by a staggering 70 percent in the last decade alone. It's not without reason that summer 2024 saw thousands of Spaniards take to the streets to demand affordable housing.

Market expert Mark Stücklin of Spanish Property Insight foresees a combination of continued price rises and increased demand pushing averages towards pre-crisis levels in the coming months.

"The Spanish property market remains remarkably strong heading into autumn. In the first half of the year, there were almost 380,000 home sales – up 8 percent year-on-year and more than a third above the 10-year average, one of the highest first-half levels on record," Stücklin told The Local Spain.

"Prices have risen 8 percent over the past 12 months and are now higher than the 2007 peak in nominal terms. (data according to the notaries' association).

Cheaper mortgages?

As September arrives, for the first time in several years the mortgage market in Spain has started showing signs of becoming more accessible to households traditionally excluded from the market, mainly young and single people. This is mainly due to the interest rate cuts by the European Central Bank.

However, these positive developments are in many cases marginal and offset by the price rises depending on where in the country you're looking.

A recent report published by the Bank of Spain points out how monetary easing, lower interest rates and income growth, albeit moderate in Spain, have opened a small window of opportunity to access home ownership. The monetary shift has made credit cheaper compared to 2023, and the average rate for new mortgages stood at 2.91 percent in May 2025.

Similarly, from summer 2024 the average profile of new mortgage holders in Spain began changing. The average age has fallen to over 40, the average income in areas where loans are granted has fallen by a modest €84 (to €20,790 per year) showing that more lower-income profiles are participating in the market.

The number of mortgages signed by a single person has grown, now making up 47.4 percent of the total. Heading into autumn, however, for the majority of people these encouraging signs are largely irrelevant when faced with such steep price rises.

"Crucially, the backdrop has improved for buyers," Stücklin told The Local.

"The Euribor has fallen to just over 2 percent, down from above 4 percent in 2023, making mortgages more affordable.

What about the rental market?

Of course, it almost goes without saying that slight drops in mortgage rates, however welcome, still don't make that much of a difference to most buyers and certainly won't to renters.

The Spanish rental market in recent years has been marked by eye-watering price rises and inequality across the regions. Spain has set records for rents per m/2 in regions such as Madrid, the Balearic Islands and Catalonia, while less popular areas like Extremadura and Castilla-La Mancha remain cheaper.

"On the rental side, the story is more one-way traffic – demand continues to outstrip supply, keeping upward pressure on rents and leaving little sign of relief for tenants," Stücklin said.

Rental costs in the more expensive of Spain are often double those in the cheapest regions, but average rents are up almost across the board in provincial capitals.

Without addressing supply issues, Stücklin only sees one likely outcome for rents for the rest of the year: "Unless there’s a serious push to unblock new housing supply, 2025 could see affordability deteriorate further – for buyers and renters alike."