Spanish house prices rise 12.7%, the biggest jump since 2007

Spain’s National Statistics Institute (INE) published its second-quarter house price index on 5 September 2025. Free-market house prices rose 12.7% compared with the same quarter of 2024, half a point more than in the previous quarter, and 4.0% compared with the first quarter. It is the largest annual rise since early 2007, shortly before the housing bubble burst.

What we know

Second-hand homes, which account for the vast majority of sales, rose 4.2% in the quarter, and new homes 2.6%. Every region recorded increases. In Catalonia, and in Barcelona in particular, prices also kept rising, with the supply of rental homes ever scarcer.

Behind the rise is a persistent imbalance: the population and the number of households are growing, mainly through immigration, while construction of new homes remains far below needs. Lower ECB interest rates and demand from foreign buyers and investors added pressure.

Differences from 2007

Analysts highlight important differences from the bubble of two decades ago: mortgage lending is growing moderately, households are far less indebted, a significant share of purchases is made without a mortgage and construction has not boomed. The risk is not so much a crash as a persistent problem of access to housing for young people and middle incomes.

What to review

For property owners, the rise increases the value of their assets, but also the associated taxes, such as wealth tax, inheritance tax or the municipal capital gains tax when property is sold or passed on. For those thinking of buying, it is worth comparing with renting and with the outlook for interest rates. Ask your adviser how this applies to you.

When house prices rise faster than wages, the problem is no longer just economic.