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Rising prices and limited supply: An in-depth look at the residential market in Q2 2025

The Spanish residential market is operating in a context of structural tensions. With strong demand and still limited supply, prices for new and used housing rose by 9.8% year-on-year in the second quarter of 2025. This analysis, prepared by the Accumin Intelligence and Tinsa by Accumin research team, translates market data into strategic insights that allow risks to be anticipated and opportunities to be identified.

### Key real estate trends that will shape the second half of the year

-	**Uneven and polarised growth:** While Madrid, the north and the main coastal areas are seeing increases of over 10%, inland provinces such as Zamora and Córdoba are recording slight declines. This territorial dispersion is key to refining investment and diversification strategies.
-	**Tight supply, upward pressure:** The volume of completed homes continues to decline (-7.9%), fuelling a persistent imbalance with demand. Despite the upturn in building permits, actual production is still not keeping pace with the market.
-	**New areas of revaluation:** The area surrounding Madrid – Toledo, Guadalajara, Segovia and Ávila – is consolidating its position as a residential magnet, driving up prices in these provinces. The data confirms a structural shift in value in the metropolitan periphery.
-	**Accessibility under pressure:** The provinces of Málaga, the Balearic Islands and Madrid lead the ranking in terms of theoretical effort, with rates above 40% of household income. This is a clear sign of the impact of rising prices on accessibility in the most dynamic markets.
-	**Non-capital municipalities gain weight:** Towns such as Benidorm, Marbella and Vélez-Málaga show double-digit growth, reflecting the vigour of secondary markets with strong tourist or mixed residential appeal.


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This report provides expert, granular insight for banks, insurers, investors, and developers who need to understand market behaviour and reduce uncertainty.

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Housing prices in Q2 2025: An in-depth look at the real estate market

Spain Coastal Housing 2025 Report: Real estate intelligence to anticipate the market

Spain’s second-home market along the coast is gaining momentum. In Q1 2025, average property prices in these areas rose by 7.2% year-on-year, driven by strong demand from both local and international buyers. This report, developed by the research team at Accumin Intelligence, offers expert analysis on the trends shaping the present and future of coastal housing in Spain. 


#### Key insights to inform your decisions


- **Second homes gaining value**:  The average price for coastal holiday homes reached €2,970/m², up 12.1% year-on-year, fuelled by limited supply and new developments focused on premium areas.
- **Northern coast outperforms**: This region saw the highest increase in transactions, up 14.4%, signalling new opportunities for investors.
- **Markets reaching new highs**: 32 coastal municipalities now exceed their pre-2008 price peaks, confirming the market’s renewed strength.


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Quarterly housing price trends in Spain Q1 2025

- The average home price in Spain increased 7.5% year-on-year in the first quarter of 2025 (+4.7% after adjusting for inflation).
The price increase in the city of Madrid is notable, with a +15.1% increase compared to the same period last year.
- Twenty-eight of 53 capital cities recorded year-on-year increases of more than 5.0%, compared to 22 in the previous quarter. The sharpest increases, above 13%, were found in Madrid, Valencia, Vigo, Palma de Mallorca, and Soria.
- The theoretical purchasing effort at the national level falls slightly to 34.9%, although it exceeds 50% of the average household's disposable income in the secondary municipalities of Marbella (Málaga), Torrevieja (Alicante), Benidorm (Alicante), Vélez (Málaga), San Lúcar de Barrameda (Cádiz) and Chiclana de la Frontera (Cádiz), as well as in the capitals of Cádiz, San Sebastián, Madrid, Málaga and Barcelona.

##### Price Evolution

In the first quarter of 2025, the average home price in Spain increased by 2.9% quarter-on-quarter and 7.5% year-on-year, according to the IMIE Local Markets statistics based on appraisals conducted by Tinsa España by Accumin. The largest price increases are concentrated in tourist areas, employment hubs, and nearby secondary municipalities. The intensity of price evolution is notable in the Community of Madrid, especially in its capital (+15.1% year-on-year).

##### Residential Demand

The initial data for 2025 continue to reflect resilient employment and a recovery in the purchasing power of average wages, both factors that sustain household solvency. In this context, residential demand has remained at robust and solvent levels, as measured by the volume of sales and mortgages, which continued to show year-on-year growth in both variables in January.


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##### New Construction Offer

Construction management permits in January remained at the same level as the previous year (-0.4%, according to MIVAU data), reflecting the offering constraints facing the expansion of the residential stock in areas with concentrated demand, mainly associated with the shortage of available land.

##### Theoretical Purchase Effort

The national purchase effort rate has moderated slightly, from 35.5% to 34.9%, thanks to the gradual restoration of household purchasing power and, to a lesser extent, the moderation in mortgage costs. However, several provinces continue to experience critical housing pressures above 45% of the average household's disposable income, making it difficult for them to access housing.

Energy efficiency and the value of residential assets in Spain

- IESE, Tinsa by Accumin, and Accumin Intelligence conduct the first study to statistically demonstrate the impact of energy efficiency on the value of residential properties in Spain, isolating it from other construction variables.
- The added value of an energy rating improvement averages 1.3%. The increase is most significant in transitions between higher and more efficient ratings, especially improvements from C to B (3.3%).
- The green premium is consistently relevant across all regions, price ranges, typologies, and ages.
- This report highlights how energy efficiency not only improves environmental performance but is also a key factor in increasing the economic value of homes in an environment of growing climate awareness and regulation, positioning itself as a strategic factor for the future of the real estate sector.

##### Climate Impact of the Real Estate Sector in Spain

The real estate sector is responsible for 40% of global greenhouse gas emissions (UNEP FI 2022) and, consequently, plays an essential role in reducing carbon emissions.

In Spain, the residential stock consists of more than 26 million homes, 95% of which were built between 1960 and 2009, before energy efficiency requirements began to be applied. This age means that nearly 95% of the Spanish residential stock is energy inefficient, with a high concentration in the E category.

##### Representative Database

This study analyzes the specific impact that energy efficiency improvements have on the value of residential properties in Spain. To do so, it uses a database of 243,414 residential properties distributed throughout Spain between 2012 and 2024.
The records collected for these homes cover three key dimensions: energy efficiency certificates (provided by Accumin Intelligence), the homes' structural and functional characteristics (year of construction, construction quality, and overall state of repair), and market valuation based on professional appraisals (both provided by Tinsa by Accumin).

##### Rigorous Methodology

Using a regression discontinuity identification methodology, the analysis leverages locally exogenous variations in energy efficiency ratings around the thresholds that separate each letter on the scale. This methodology makes it possible to isolate the specific impact of the improvement in energy ratings, focusing exclusively on the effect of the certificate on the value of the homes and eliminating external influences. Furthermore, to ensure temporal consistency and validity of the observations, the interval between the appraisal and the energy efficiency assessment is always less than 12 months. This approach ensures that the relationship between energy efficiency and market value is representative of current reality and not biased by time factors.
All of this guarantees robust and accurate results that specifically reflect the economic value that greater energy efficiency brings to the real estate market.

##### Analysis of Results

The analysis reveals that the added value of a one-letter improvement in the energy rating is, on average, 1.3%. Some transitions, such as from category "C" to "B," have a greater impact, reaching 3.3%. This suggests that buyers value energy efficiency improvements more when they represent a significant change in sustainability and energy-saving standards. Even so, the "Green Premium" is present in all transitions between energy efficiency levels, making it a widespread phenomenon in the market.

Furthermore, the "Green Premium" is not an isolated phenomenon or exclusive to one market segment, but is consistently evident across all regions, price ranges, ages, and housing types.

The results thus confirm the importance of energy efficiency as a cross-cutting attribute in real estate valuation.

The trend observed over the last decade suggests that energy efficiency will continue to play a fundamental role in property values, driven by both market demand and public policies geared toward sustainability. The evidence presented underscores the need to continue incentivizing energy efficiency in the real estate sector, not only as a tool for reducing emissions, but also as a key strategic factor for increasing the economic value of properties.

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Housing on the Spanish coast 2024

##### General Evolution of the Coastal Housing Market

Residential prices in coastal municipalities as a whole registered a quarterly variation of +1.5% and a year-over-year variation of +5.7% in the first quarter of 2024, according to appraisal data from Tinsa España by Accumin. This represents a stronger push for coastal housing prices than the national average, resulting from widespread competition for space on the coast, where the concentration of demand for second homes and vacation rentals competes with local demand for primary homes.

In this environment, new construction, insufficient to meet existing demand, tends to prioritize (more profitable) vacation use, and in the second-hand housing segment, there is a growing convergence of primary and second-home products, which in some areas are becoming substitutes. All of this reduces the available supply of primary homes and hinders access for local demand in some areas. Although their share is a minority compared to domestic buyers for personal use, the increased presence of foreign buyers, buyers who purchase for rental, and professional buyers in the holiday segment is significant. Foreign purchases and sales on the coast approached their highest share to date in 2023, driven by purchases by foreign residents, which have increased their presence over the last decade and even more so in the last two years.

Meanwhile, housing permits in coastal municipalities decreased by 22.9% in 2023, compared to the entire country, where they remained stable. Thus, construction is focused on completing homes already started, with no new projects being added in these areas despite the existing demand, mainly due to obsolete urban development plans and the shortage of available land.

##### Coastal Property Prices (Primary and Second Homes)

Year-over-year variations in coastal residential prices range from +1.9% on the North Coast to +8.3% on the Canary Islands.

95% of the 257 coastal municipalities analyzed in the report saw an increase in average home values ​​in the last year. The increase exceeded 10% in 26 of them, mostly located in the Balearic Islands, the Canary Islands, Alicante, Malaga, Valencia, Castellón, and Almería. Price drops in the last year were minor (12 municipalities) and moderate (between -0.4% and -2.2%).
The municipalities on the Spanish coast with the highest average residential value (€/m2) are located on the island of Ibiza.

##### Vacation Home Prices on the Coast

The survey of Tinsa's technical network places the average price of vacation homes on the coast at €2,650/m2 during the first quarter of 2024. This price reflects a +3.9% year-over-year increase and represents a slowdown compared to the +6.3% growth recorded in the same period of 2023.

This growth in vacation homes is higher than the +3.3% nationally, but lower than the +5.7% for general coastal homes, which points to increased pressure on the primary residence market in a context of increasingly less differentiated residential products that allow for conversion to vacation homes, whether through purchase or rental.

The highest estimated prices for vacation homes are in the Balearic Islands, certain areas of Girona and Cádiz, and in Málaga and its surrounding areas, in line with high-income demand. At the lower end, with essentially national holiday demand, are Lugo, Pontevedra, and some areas of Almería and Murcia.

No corrections are expected in second-home prices; if they occur at all, they are estimated to be minor and not very significant.

Agricultural land in Spain 2023

- In 2023, the value of agricultural land will increase for most crops, despite adverse climatic and economic conditions.
- Increases in land values ​​are concentrated on farms with access to water and crops with potential for processing.
- The crops that have generated the highest returns in the last 5 years, according to Tinsa appraisals, have been dryland fruit crops (+3.4%) and irrigated herbaceous crops (+2.8%).
- Rising cereal prices due to the war in Ukraine, the recovery in demand for stone and pome fruits, and the increase in lemon cultivation compared to oranges are among the trends for 2023.
- The prolonged drought is driving the search for techniques that allow for efficient water use, and some farms are beginning to be converted from irrigated to dryland.

##### Performance of the agri-food sector in 2023

Drought and altered weather patterns have led to a reduction in production in 2023 in an agricultural sector that had already been penalized by marked inflation in production costs since 2021. However, in most cases, lower harvests have allowed higher production costs to be passed on to food prices. This has helped limit the impact of this situation on farm returns. Consequently, land prices have generally remained stable, with moderate increases for some crops, generally more pronounced in irrigated crops.

##### Herbaceous Crops

High food prices due to a poor harvest affected by prolonged drought and adverse weather conditions, coupled with a further increase in grain prices due to disruptions in international trade caused by armed conflicts in Europe, have increased the returns generated by arable crops in 2023.
However, the medium-term outlook shows that arable crops have been declining in some areas of Spain for several years due to their low profitability. There is a trend toward converting farms from dryland arable crops (wheat, barley, or oats) to other more profitable crops (generally woody crops, such as vines, olive groves, or fruit trees). This is also driving up land prices, and over the last five years, arable land has increased in value by +2.8% in the case of irrigated land and +1.7% in the case of dryland land.

##### Olive Grove

In 2023, olive production has been severely affected by early high temperatures that compromised fruit formation. However, for now, this is an isolated incident that has not affected land values.
The stability of olive oil consumption in Spain over the last decade guarantees a stable income and makes olive groves perceived by farmers as a "safe haven." Over the last five years, the value of land used for olive groves has grown by +1.2% in irrigated land and +0.2% in dry land.

##### Vineyard

The lower wine consumption since the pandemic has impacted the value of land used for vineyards in some areas, although overall it remains stable.
The volatility of production due to its sensitivity to climate, coupled with rising production costs that have not been fully passed on to final prices, is increasing pressure on crop yields and driving the vineyard sector toward a shift from dryland to irrigated land, using intensive and super-intensive methods.
The value of land used for vineyards has grown by +1.1% in irrigated land and +1.9% in dry land over the last five years.

##### Fruit Trees

Stone and pome fruit trees are showing signs of recovery after years of reduced sales due to a shift in consumer preferences toward other fruit varieties, such as tropical fruit. This recovery in demand, coupled with reduced production due to the impact of climate change and prolonged drought, has led to improvements in crop profitability over the last year.

Meanwhile, nuts are showing signs of moderation due to stagnant almond prices, although pistachio prices continue to drive growth.
Tropical fruit production is compromised by water scarcity.
Overall, the value of land used for fruit trees has increased by +3.4% in the last 5 years under dryland conditions and has remained stable (-0.6%) under irrigated conditions.

##### Citrus Fruits

Competition from imports, coupled with the impact of climate change and drought, which are reducing production, is exacerbating the lack of generational turnover and fostering a trend toward vertical integration of farms to optimize costs. This has led to a dynamic sale and purchase of citrus farms, driving their value upward.

The value of land used for citrus fruit has increased by 1.0% over the last 5 years.

##### Vegetables and Greenhouses

In general, these are highly optimized and export-oriented crops, which has reduced the impact of drought and asymmetric competition from imports on production.

Growing water restrictions in several areas due to the drought are driving the abandonment of this water-intensive crop and its conversion from horticultural farms to dryland cereals.

Thus, the value of land used for vegetable crops over the last 5 years has grown by 1.7% outdoors and by 1.1% in greenhouses.

##### Meadows, Pastures, and Grasslands

The overall value of pastures has decreased slightly in the last two years due to drought, which has reduced production, and the abandonment of land in some areas.

However, in several areas, the value has remained stable or increased slightly thanks to livestock activity. Rising prices for grain and feed have led livestock farmers to turn to pastures to supplement livestock feed and reduce costs.

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