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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.

Economic growth will continue to support the dynamism of the real estate sector in the coming months. The decline in interest rates, the strength of the labor market, and positive net migration will sustain strong demand in 2025, although it is expected to decelerate in 2026 as a result of slower economic growth.

Construction GDP grew 2.6% thanks to a 6.9% increase in building construction, despite the decline in other subsectors. The mortgage market increased its number of loans by 10.7%, primarily due to the recovery of affordable housing.

The fact that there is not enough affordable housing in Spain right now is not up for debate. However, as last week’s proposals show, not everyone agrees on the solution.

The accumulated Construction GDP grows 10.1% in the second quarter of 2024, with increases in all subsectors. In a change of trend, the mortgage market is now increasing 2.2% in real amount and is set to continue advancing

While many economic policy decisions are made with the best intentions in mind, things do not always go as planned. Numerous examples of this can be found in the real estate market.

Falling interest rates, the gradual recovery in the eurozone and a more positive demographic outlook are expected to boost residential demand, which in a context of relatively limited housing production will lead to house price growth in the current biennium.

Since 2013, labor productivity in the construction sector, measured as GVA per hour worked in real terms, has fallen by more than 20%. In comparison, the growth in the same indicator for all sectors is 5%.