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Published on Monday, June 2, 2025

Spain | Overview of a strained real estate market

Summary

The real estate sector regained dynamism in 2024. Sales grew in much of the country, driven by a more favorable economic environment. However, the new supply remained insufficient to meet demand. The performance of the sector will be conditioned by several factors.

Key points

  • Key points:
  • The economic scenario will remain favorable for demand, with much of it swelling the volume of accumulated unsatisfied demand from recent years.
  • As we have analyzed in BBVA Research, the lack of ready-to-develop land, due to the bureaucratic complexity of land conversion processes, and the shortage of skilled labor complicate the initiation of new projects.
  • Although construction activity will maintain relatively high growth rates, housing starts will not stray far from 310,000 units. This is approximately 80,000 more than will be completed in the current two-year period. However, this volume is still low compared to the existing need.
  • Given this situation, the price has no alternative but to continue growing by an average of around 6.5% per year. This growth will be slightly higher in 2025 than in 2026 due to the observed economic slowdown.
  • Government administrations have a key role to play in promoting housing development. It is necessary to reach a political consensus that encourages investment in the sector and increases the supply of affordable housing.

Geographies

Documents and files

Press article (PDF)

Overview of a strained real estate market

Spanish - June 2, 2025

Authors

FL
Félix Lores BBVA Research - Principal Economist
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