The average cost of both new and existing housing saw an increase of 7.5% during the first quarter of the year in Spain, reaching 1,902 euros/m2, as per data provided by Tinsa. The appraisal firm indicates that values in city centres such as Palma, Málaga, Madrid, and Santa Cruz de Tenerife have surpassed the peaks seen during the real estate bubble, showing a rise of 13.2%. In real terms, adjusting for inflation, the year-on-year increment in prices is reported at 4.7%.
Tinsa’s figures for the first quarter reveal an acceleration in growth compared to the previous quarter, which recorded an increase of 4.6% (2.5% when adjusted for inflation), reflecting the resilience of employment that underpins household stability and strong demand for residential property.
Demand has also been bolstered by increased accessibility to credit following interest rate reductions, with transactions involving no mortgage representing a significant portion (49% according to notaries and 54% based on INE data).
Growth Exceeds 12% in the Balearic Islands, Madrid, and Cantabria
By region, the Balearic Islands (12.8%), Madrid (12.6%), and Cantabria (12.2%) recorded the highest annual growth rates.
According to Tinsa, the Community of Madrid surpassed its previous peak from the real estate boom by 1.9% this quarter, joining the Balearic Islands (21.4%), which exceeded it in 2023. However, when inflation is factored out, both regions remain below their highest recorded values (-11% for the Balearic Islands and -27% for Madrid).
Among provinces, double-digit increases were noted in Soria (16.5%), Santa Cruz de Tenerife (13.2%), Balearic Islands (12.8%), Madrid (12.6%), Malaga (12.5%), Cantabria (12.2%), Alicante (10.1%), and Valencia (10.1%).
The provinces within the Balearic Islands, Santa Cruz de Tenerife, and Madrid surpassed their previous records with increases of 21.4%, 5.8%, and 1.9%, respectively, though when taking inflation into account, all remain under their historic highs.
San Sebastián is the Most Expensive Capital; Madrid Rises by 15%
San Sebastián holds the title for the most expensive property market in Spain, with a price of 4,500 euros/m2, followed by Madrid (4,285 euros/m2) and Barcelona (3,998 euros/m2).
In terms of city capitals, the highest increases were recorded in Madrid (15.1%), Valencia (14.5%), Vigo (14.1%), Palma (13.3%), and Soria (13.1%). In contrast, Barcelona experienced an 8% year-on-year increase.
Nearly 35% of Rent is Allocated to Mortgage Payments
Tinsa reports that Spaniards dedicate 34.9% of their available income (down from 35.5% the previous quarter) to cover the first annual mortgage payment.
The greatest financial burden is observed in Malaga (59%), the Balearic Islands (49.4%), Cádiz (43.9%), Madrid (43.1%), Alicante (38.9%), Seville (37.3%), and Barcelona (37%). Additionally, in 19 capitals, the effort level surpasses 35%, exceeding 50% in Cádiz, San Sebastián, Madrid, Malaga, and Barcelona.
The average mortgage in Spain for the fourth quarter of 2024 (the latest available data) stood at 145,193 euros, with a monthly average payment of 756 euros.
Tinsa notes that the default rate remains at moderate levels, around 2.5%, with loans covering more than 80% of property values below initial levels.
