The Spanish real estate market forecast for 2025 predicts a close to 750,000 real estate transactions, with a price increase projected between 4% and 6%. However, this optimistic outlook is tempered with signs of slowing down that could emerge towards the end of the year. This is largely due to supply issues, inflation, and potential interest rate hikes.
Vicenç Hernández Reche, an economist and CEO of Tecnotramit, notes that the current pressure on prices stems from different origins than the 2008 crisis, suggesting that the repercussions could be more severe socially than macroeconomically. The lack of new construction remains a key obstacle, with an annual shortfall exceeding 100,000 homes. This gap between supply, which is around 80,000 to 100,000 new constructions annually, and demand, close to 200,000, is driving prices up for both buying and renting.
Regarding the potential real estate ‘bubble’ in Spain, Hernández Reche believes that while the situation could be classified as such from a financial orthodoxy standpoint, the current characteristics differentiate it from the 2008 bubble. Financing criteria are more cautious, demand remains solid, and price increases vary by geographic location. However, he warns that any eventual collapse would affect the less privileged layers of the population more severely.
In the mortgage field, fixed-rate mortgages are expected to become more prominent than variable ones, although they will continue to be difficult for many to access. New mortgage loans will maintain high-interest rates compared to levels before 2022, which could complicate the situation for families with medium and low incomes if prices do not stabilize.
Finally, the economist suggests that the solution to these problems lies in a national supply and rehabilitation plan, which includes the need for more housing, both free-market and affordable/social. He also advocates for streamlining the granting of licenses and promoting large-scale energy rehabilitation, emphasizing the need for housing policy to focus more on the reality of the market than ideological biases.
