According to estimates by Tinsa by Accumin, in the first quarter of 2025, new and second-hand house prices in the province of Alicante increased by 10.1% year-on-year. In the country as a whole, the average price of residential property in the period increased by 2.9% quarter-on-quarter and 7.5% year-on-year to €1,902 per square metre.
In real terms, excluding the impact of inflation, price growth for the year was 4.7%. It was highest in tourist areas, employment centres and nearby secondary municipalities. Of particular note is the high intensity of price growth in the Autonomous Community of Madrid, especially in its capital (+15.1%).
The data for the first quarter show a further acceleration in house price growth compared to the annual rate of change recorded in the previous quarter, which was 4.6% (2.5% in real terms). The early FY 2025 data continues to reflect the resilience of employment, which is supporting households' ability to pay and keeping housing demand stable.
More Affordable Mortgages Increasing Demand
Demand has been boosted by easier access to mortgage credit as a result of less tight monetary policy, as well as sales activity and purchases without mortgages, which still account for a significant proportion of transactions (49% according to notaries and 54% according to the National Institute of Statistics).
The gradual recovery in household purchasing power and, to a lesser extent, the decline in mortgage costs have made it possible to reduce the theoretical effort required to buy a home in Spain from 35.5% to 34.9% of income. The regions with the most severe strains, exceeding 45% of the average household income, are the following:
- Balearic Islands;
- the Autonomous Community of Madrid;
- the provinces of Málaga;
- Cadiz.
At the municipal level, these are:
- Cadiz (60.4%);
- San Sebastian (56.8%);
- Madrid (56.6%);
- Málaga (56.2%);
- Barcelona (55.1%).
According to the National Institute of Statistics, the average mortgage loan in Spain in the fourth quarter of 2024 (latest available data) was 145,193 euros and the monthly payment was 756 euros.
Leaders In Price Growth
Among the Autonomous Communities, the Balearic Islands (12.8%), Madrid (12.6%) and Cantabria (12.2%) led the way in terms of year-on-year price increases. On the other hand, prices fell slightly in Melilla (-1.3%) and remained virtually unchanged in Ceuta (-0.4%) and Extremadura (-0.5%).
In the first quarter, the Autonomous Community of Madrid surpassed the maximum recorded during the property boom (1.9%), joining the Balearic Islands (21.4%), which has already surpassed it in 2023. However, if we exclude the impact of inflation, which makes the two periods comparable, both communities are still below these peaks: -11% in the case of the Balearic Islands and -27% in the case of Madrid.
Among the provinces, the peaks of the ‘noughties’ were also exceeded in Santa Cruz de Tenerife, by 5.8%. Nevertheless, when adjusted for inflation, this value is still below the peak, at 24%.
A total of 28 provincial capitals showed sharp price increases of more than 5% compared to 22 capitals in the previous quarter. Madrid (+15.1%), Valencia (+14.5%) and Soria (+13.1%) recorded the largest year-on-year increases.
The city with the highest price per square metre of housing is San Sebastian - 4,500 euros, followed by Madrid (4,285 euros/m2) and Barcelona (3,998 euros/m2). The cheapest property purchase is in Ciudad Real (1125 euro/m2), Zamora (1148 euro/m2) and Lugo (1178 euro/m2).
IMIE Local Markets statistics also include a list of more than 70 municipalities that, while not provincial capitals, are considered major housing markets based on population density and sales and purchases. The cities of Velez-Malaga (17.6%), Marbella (15.9%), Benidorm (15.8%), Vigo (14.1%), La Laguna (13.1%), Torrelavega (12.8%), Roquetas de Mar (12%), Sanlúcar de Barrameda (10.6%) and Jerez de la Frontera (10.3%) experienced double-digit year-on-year growth in the first quarter of 2025.
