Spain real estate market outlook 2025: A guide for international buyers

Spain property market overview 2025

While northern Europe grapples with economic and political headwinds, Spain's property market continues its soaring ascent into 2025, fuelled by a robust economy projecting 2.1% GDP growth and inflation settling at a manageable 1.5%. The market's performance would make any seasoned observer raise their glass of Rioja – sales are up 9.0% year-on-year,* with some regions like Castilla-La Mancha and Madrid enjoying stellar growth above 19%.

While these numbers paint a rosy picture, there's an elephant in the room: the Spanish Prime Minister's unexpected announcement on January 14th that non-resident, non-EU buyers will face a 100% property tax. More on that bombshell later.

Foreign buyers, accounting for 15% of transactions, continue to reshape the market's landscape. The days of British dominance are fading like a tourist's tan in November, as Polish and Moroccan buyers stake their claim alongside other nationalities. While Alicante and Málaga remain the darlings of international investors, emerging areas like Murcia are turning heads with their blend of affordability and authentic charm.

Price trends tell a tale of two Spains: the Canary Islands and Cantabria are soaring (18.8% and 16.0% respectively), while Navarra and Galicia take a siesta with modest declines. Meanwhile, mortgage lending has jumped 24.0%, and the impending end of the Golden Visa program is causing about as much concern as a cloud passing over the Costa del Sol – buyers are increasingly favouring affordability, quality of life, and practical factors like connectivity over traditional prestige. All signs suggest Spain's property market in 2025 remains as inviting as a cold beer on a warm Spanish evening.

*Figures from Spanish notaries November 2024

Spain's 2025 economic outlook

Spain's economic indicators paint an encouraging picture for 2025, with BBVA Research reporting 2.5% GDP growth in 2024 and projecting a further 2.1% increase for the year ahead. This growth, powered by reduced interest rates and renewed Eurozone activity, has provided robust support to the housing market.

"Spain's economic resilience continues to surprise and delight in equal measure," observes Louise Dell, co-founder of Kyero. "The country's ability to maintain robust GDP growth while navigating global uncertainties speaks volumes about its fundamental strength as a property market."

Inflation has reached a three-year low of 1.5%, but it’s worth noting that food and drink prices have soared by 30% since the pre-pandemic era. The cost of living is still lower than all the northern European countries (and the USA), but it’s by no means as cheap as it once was. While energy prices have retreated 20% from their 2023 peaks (hurrah!), and wages have made a modest 12.8% climb.

Property sales grew by 9.0% year-on-year, according to Spain's Notaries, with Castilla-La Mancha, Madrid, and Galicia each posting impressive gains. And Solvia has recently forecast a 3% house price growth for 2025, which suggests a market going from strength to strength.

The buyer demographic outlook is equally interesting. INE data shows foreign-born residents now comprise 18.31% of Spain's population (8.9 million people), and this is projected to reach 39% within fifty years.

"The Spanish market is demonstrating remarkable adaptability," comments Alfredo Bloy-Dawson, Property Marketing Consultant based on the Costa del Sol. "With GDP growth holding steady, inflation at a three-year low, and property sales up 9.0%, we're seeing a market that's both mature and dynamic. Yes, the cost of living isn't what it was pre-pandemic, but Spain still offers compelling value compared to Northern Europe – and buyers know it."

100% tax on foreign buyers
 

The bombshell announcement from Prime Minister Pedro Sánchez this January has sent shockwaves through the property market: a proposed 100% tax on property purchases by non-EU, non-resident buyers. Sánchez framed this as a response to Spain's housing crisis, stating, "The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants."

With 27,000 properties purchased by non-EU residents in 2023, the potential impact is significant. However, the proposal faces substantial hurdles. Property transfer tax is controlled by regional governments, not Madrid, making implementation in opposition-run regions like Valencia and Andalucia particularly challenging. The measure also faces potential conflicts with both Spain's constitution and EU law. Given Sánchez's minority government and history of struggling to pass controversial legislation, this may prove more political theatre than practical policy.

Spanish Lawyer Miguel Manzanares, CEO of leading Costa del Sol-based conveyancing lawyers Manzanares Lawyers says clearer guidance on the intended direction of this measure has come to light in the days since the PM’s shock announcement. “It appears that the proposal does not refer to a tax equating to 100% of the property value but rather to a 100% increase in the applicable tax on property acquisition for non-EU, non-resident buyers.” This adjustment significantly alters the interpretation and reduces the perceived extremity of the policy he writes and in any case “The legislative process requires thorough drafting, consultation, and parliamentary approval, which, in this case, seems increasingly challenging given the lack of majority support.”

Here is everything we know so far about the 100% tax of foreign buyers announcement. While legal experts suggest this proposal faces significant obstacles and is unlikely to materialise in its current form, those considering a Spanish property purchase might want to accelerate their plans – if only for peace of mind during this period of uncertainty.

Spanish property market Investment opportunities: where to put your euros in 2025

While northern Europe shivers through a literal and economic winter, Spain's property market continues its remarkable ascent, with property investment opportunities sprouting up faster than beach bars in August. Drawing on conversations with leading estate agents, official notary data, and our own portal statistics, here are Kyero’s tips for Spain's most promising property investments for 2025.

The usual suspects
"The luxury sector continues to demonstrate remarkable resilience," notes Nadine Starck of Starck-Estates in Benidoleig, in what might be the understatement of the year. Nowhere is this more evident than in Ibiza, which Sofia Sanchez Watson of Barclays Properties describes as slowly "becoming the Monaco of the Mediterranean." Meanwhile, traditional investment strongholds - Marbella, Madrid, Barcelona, and Valencia - maintain their steady performance with the kind of reliability that would make a German train timetable jealous.

Foreign buyer hotspots
The concentration of international purchases at the end of 2024, according to Spanish notaries reads like a sun-seeker's wish list.

Top 5 Spanish provinces where foreign buyers were the most prominent: 
Alicante: 43.1% of all property sales are to foreigners
Málaga: 34.8%
Santa Cruz de Tenerife: 32.7%
Balearic Islands: 32.5%
Girona: 27.1%

Top Locations in Spain for Foreign Property Buyers in 2024
(Based on the most-searched destinations in each province on Kyero)

Hidden gems and emerging hotspots for 2025

For those seeking value, Murcia province emerges as 2024's dark horse, with a 12.7% surge in foreign buyer interest, proving that 300 days of sunshine needn't come with a Marbella price tag.

Along the Costa Blanca, local estate agent Nadine Starck recommends San Pedro del Pinatar in the south, which tempts with its natural parks and therapeutic mud baths, while in the north she highlights:

Benitachell - For affordable sea views
Oliva - Lower prices, traditional atmosphere and uncrowded beaches
Benissa - Stunning vistas at digestible prices
La Marina - Established expat community without premium pricing
Pilar de la Horadada -  Up-and-coming area with new developments

Meanwhile, on the Costa del Sol Costa, rising stars include Estepona, which Tracie Buckman of MDL Carlton International praises for maintaining "traditional Andalucian charm while offering everything from high-end developments to affordable town properties." La Cala de Mijas stands out for Keith Spitalnick of Target Property, who highlights “it’s a village with a lot of heart and soul,"  and notes the upcoming 320,000 square metre 'Great Park of the Costa del Sol,'due to open in May 2025 in the town.

Looking west, Lorraine De Marco points to Alcaidesa in Cádiz, as benefiting from the "Sotogrande ripple effect," translation: get in while you can afford it. While Shirin Sharifi recommends Manilva and Duquesa Port for value. Inland, David Lever, co-oner of Ideal Country Property suggests Alhaurin de la Torre, Coin, and Cartama as excellent lifestyle choices on a budget.

Elsewhere, Murcia province, has seen a 12.7% surge in foreign buyer interest - proving that 300 days of sunshine needn't come with a Marbella price tag. Los Alcázares, in particular, is emerging as the dark horse of 2025, offering that rare combination of affordability and authenticity.

And let’s not forget the islands; “we're particularly excited about new developments," says John Goldacre of GoldAcre Estates, pointing to projects in Caleta de Fuste and Corralejo, in Fuerteventura, Canary Islands. While Jacomo Waldherr, CEO and owner of Forum Inmobiliaria, recommends Lajares in north Fuerteventura, which has “seen lots of new development and growth in recent years.” 
 
For more inspiration, check out our handy where to buy property in Spain in 2025 article for advice on the best locations for property investments in Spain. 

Cheapest locations to buy property in Spain

Not everyone needs a villa with infinity pool views to enjoy their new life in Spain. These are the cheapest towns and resorts to buy property in Spain, according to Kyero data:

Who is buying property in Spain: a changing of the guard

The face of foreign property ownership in Spain has been undergoing a metamorphosis for a while now, and it's not because everyone's had too much sun. While international buyers still account for a healthy 15% of all property transactions in Spain, the mix of nationalities now resembles a United Nations coffee morning rather than the British-German-French triumvirate of old.

Remember when you couldn't move for British buyers in Costa del Sol estate agents' offices? Those days appear to be fading faster than a Benidorm suntan.

British purchasers, who commanded a whopping 38% of foreign buyers in 2008, now represent a more modest 8.5% of the market. “This variety is healthy for the market - if buyers from one country slow down their purchases, it doesn't hurt the overall market as much as it used to,” says Alfredo Bloy-Dawson, a property marketing consultant based on the Costa del Sol.

"The market is experiencing a fascinating diversification," observes Louise Dell, Kyero's co-founder. "While traditional Northern European buyers remain significant, we're seeing emerging interest from unexpected quarters."

Indeed, Polish buyers have muscled their way to fourth place, now acquiring Spanish properties at nearly the same rate as the British, while Moroccan purchasers hold a solid third position with 5.5% of foreign purchases.

The geographic concentration of these purchases tells its own story. Alicante province, apparently determined to become Europe's most international corner, sees a remarkable 43.1% of all property sales going to foreign buyers. Málaga follows at 34.8%, while the Canarian sunshine of Santa Cruz de Tenerife attracts 32.7% of international purchasers.

Age demographics paint an equally intriguing but not entirely unsurprising picture. The 55-64 bracket dominates with 37.8% of buyers, suggesting that dreams of Spanish retirement remain alive and well, even if they now come with a side order of remote working hustle. Meanwhile, younger buyers (35-44) have declined by a sobering 38%.

"We're seeing new buyer nationalities, including Eastern Europeans such as Hungarians, alongside continued interest from Canadian buyers," notes Sofia Sanchez Watson from the Costa Blanca, while Mia Pearlman reports a surge in interest from the Netherlands on the Costa del Sol, proving that the Dutch know a good thing when they see it.

Spanish property market trends to look out for

The much-trumpeted demise of Spain's Golden Visa scheme due to happen in April 2025, has caused quite the flutter in certain circles, though the actual impact on the market is likely to be about as significant as a drop of sangria in the Mediterranean. While Russian and Chinese investors might need to find alternative routes to their Spanish dream home, the scheme's focus on €500,000+ properties means its departure will hardly register on the market's Richter scale.

Andalucia's contemplating putting its estate agents through their paces with new regulations. Before you shed a tear for the industry, consider this a much-needed spring clean of the sector. Raising the bar for entry might just mean fewer instances of that time-honoured tradition of everyone and their cousin deciding they fancy a piece of the real estate pie.

Barcelona and Málaga have been flexing their regulatory muscles, implementing stricter controls on tourist rentals. Rather than dampening enthusiasm for Spanish property, this is merely redirecting buyers' GPS coordinates to friendlier locations that aren’t overrun with tourists (yet). Think of it as urban planning with an attitude.

Here's a novel concept: people are buying where they can afford rather than where the glamour guides tell them to. As the Costa del Sol and Balearics continue their impression of London/New York price tags, buyers are discovering that Spain has more than one coast. The savvy are venturing into Murcia, Almeria, Granada and Cadiz, finding that Spanish charm doesn't always come with a premium postcode.

COVID didn't just bring us sourdough expertise; it sparked a full-scale lifestyle revolution. The traditional parade of retirees seeking Spanish sun has been joined by laptop-wielding families who've discovered they can answer work emails just as effectively from a beachside terrace. This isn't just estate agent gossip – from the Costa Blanca to the Costa del Sol, communities are witnessing a shift from seasonal holiday homes to year-round residences.

This influx of permanent residents is causing some interesting challenges. Towns designed for summer tourists are suddenly finding themselves hosting year-round communities demanding such luxuries as functional winter heating and decent WiFi. The checklist for potential locations now reads less like a holiday brochure and more like a practical guide: proximity to international airports and schools have become as crucial as sea views and sangria bars.

Predictions for the Spanish property market in 2025: optimism ahead

Spain's property market enters 2025 with measured optimism, supported by resilient demand and a stabilising economic outlook. "We're not looking at a boom, but stability is a good thing," says Alfredo Bloy-Dawson, a property marketing consultant based on the Costa del Sol. "The real challenge will be managing expectations – from vendors, buyers, and the industry itself."

The Mediterranean coastline and islands continue to shine, with supply shortages in prime locations like Marbella and Ibiza keeping prices buoyant.

Costa Blanca North's Nadine Starck predicts "steady to slight growth," while in the south, Sofia Sanchez Watson notes properties often sell before hitting the market. On the Costa del Sol, Roger Widen from Homerun Brokers observes what he calls the "ketchup effect" – pent-up demand finally spilling over.

The market's demographic landscape has evolved into a diverse mosaic of Europeans, North Americans, and Middle Eastern buyers, providing welcome insulation against country-specific economic fluctuations. "Marketing to a wider international audience is now the norm," notes Bloy-Dawson. "Agents who adapt will thrive. Those who don't? Well, let's just say there are easier industries to dabble in."

April 2025's termination of the Golden Visa program has caused less concern than expected. As Louise Dell, Kyero Co-founder, puts it, "it's a headline-grabber, but the vast majority of Spain's buyers don't fall into this category." Meanwhile, regions like Andalucia are implementing stricter licensing requirements and zoning rules. "Raising the barrier to entry will weed out the dabblers," says Lorraine De Marco of Space Real Estate. "It's a win for professionalism."

Tourist hotspots like Ibiza and Barcelona are tightening controls on short-term rentals, potentially redirecting buyers to less restricted areas. New initiatives, including "Alquiler Seguro" schemes and developments in Fuerteventura, offer hope for locals previously priced out of the market.

While 2025 isn't expected to deliver runaway growth, it promises steady progress. Price increases may be modest compared to previous years, and sales volumes could stabilise, particularly in saturated markets like Marbella. Yet for those ready to navigate its complexities, the Spanish property market remains full of opportunity. As Bloy-Dawson quips, “It's not the wild west, but it's not a sleepy village either. Buckle up—it's going to be an interesting ride.”

Conclusion

As we look ahead to 2025, Spain's property market tells a story that goes beyond mere transactions and price points – rather like a good paella, it's all about the perfect blend of ingredients. What emerges is a picture of a market coming of age, where the traditional allure of sunny costas meets the pragmatic demands of a new generation of buyers who want their Spanish dream served with a side of fibre-optic broadband. 

While recent policy proposals like the foreign buyers' tax have stirred the pot, the fundamental appeal of Spanish property remains as strong as ever. The numbers are as robust as a well-aged Rioja: 9.0% sales growth, controlled inflation at 1.5%, and mortgage lending up 24.0%. But the real story lies in the market's remarkable ability to evolve. As British buyers share the stage with Polish and Moroccan investors, Spain's property landscape is becoming as diverse as a tapas menu.