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Residential: international demand and supply shortage drive the market
The Spanish real estate market is experiencing a phase of strong expansion, with the residential sector reaching record levels not seen in the past twenty years. Growth is being driven by the imbalance between supply and demand, increasing interest from international buyers, the development of new university hubs, and improved access to credit.
In the first half of 2025, transactions increased by 7.6%, exceeding the average of the past decade by more than 33%. On an annual basis, the number of transactions reached 750,000 units (+5%), the highest level since 2007.
On the pricing side, Spain continues to stand out in the European landscape for its competitive profile. According to the latest Dils Lucas Fox report, property values have increased by 34% over the past five years. Since 2016, the overall increase has reached 47%, compared to 26% inflation, ensuring positive real returns for investors.
Growth is supported by a persistent shortage of supply. Despite a 15% increase in new construction, totaling more than 115,000 units, volumes remain insufficient to meet demand.
“New developments are still far from meeting demand, while the Spanish population continues to grow,” comments Paloma Pérez Bravo, co-CEO of Dils Lucas Fox. “This imbalance, combined with improved financing conditions, is the main driver of the current expansion phase and strengthens Spain’s positioning as one of the most attractive residential markets in Europe, both for lifestyle purchases and long-term investments.”
In this context, Spain consolidates its position as one of the most attractive residential markets in Europe, both for quality-of-life driven purchases and long-term investment strategies.
New living trends also play a key role: smart working and international mobility have encouraged the arrival of highly skilled professionals and digital nomads, contributing to the growth of both the flexible rental market and purchases in major cities and coastal destinations.
“The boost to the real estate market also comes from universities,” adds Damasceni. “In recent years, Madrid has established itself as a key destination for international private universities, with centers of excellence such as IE Tower, one of the few vertical campuses in the world.”
At the same time, the strengthening of academic and technological hubs – in cities such as Madrid, Barcelona and Málaga – is reshaping the economic and social fabric, attracting talent and investment.
Data also confirms the growing weight of international demand: in the first half of 2025, transactions by foreign buyers reached approximately 49,750 units, up 15% and 50% above the average of the past decade.
Branded residences: luxury accelerates and strengthens the country’s appeal
Alongside the traditional residential market, the branded residences segment is also growing rapidly, now one of the most dynamic areas within the high-end real estate sector. Spain currently counts 38 initiatives, 25 of which are under development.
Nearly three-quarters of the supply is positioned in the luxury segment, with projects linked to global brands and located in leading destinations such as Marbella, Madrid and Tenerife. While tourist locations still account for the majority of the market, urban and hybrid concepts are growing quickly, with Madrid leading the way.
The entry of international operators has marked a turning point in the evolution of the luxury residential sector, contributing to rising prime values and the launch of new developments.
Branded residences offer five-star hotel services and high-quality standards, reflected in a price premium ranging between 20% and 40% compared to traditional properties. Average values stand at around €18,000 per square meter, with peaks of up to €25,000 for the most exclusive assets.
This segment is helping to strengthen Spain’s positioning on the international stage, expanding the investor base and confirming the country as a benchmark destination for those seeking a balance between investment and quality of life.