Housing Prices in Spain Rise by 9.8% Year-on-Year in Q2 2025, According to Tinsa by Accumin

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Spain’s real estate market continues its upward trajectory. According to the latest valuation report from Tinsa by Accumin, average home prices — both new and pre-owned — rose 2.6% quarter-on-quarter, resulting in a 9.8% year-on-year increase in the second quarter of 2025. This growth rate exceeds inflation by 7.7 percentage points, reinforcing the strong appreciation of residential assets across the country.

Key Drivers Behind the Rise in Residential Property Prices

The sustained momentum in the housing market is fueled by several factors:

*A level of home sales not seen since 2008
*Recovery in household purchasing power
*Stable employment levels
*Tamed inflation
*Slight moderation in mortgage financing costs

These dynamics are stimulating strong demand amid limited supply, accelerating price growth compared to the previous quarter.

High-Growth Areas: Madrid, Islands, and Coastal Regions

The most pronounced annual price increases — above 10% — are concentrated in:

*Madrid
*Balearic and Canary Islands
*Mediterranean coastal areas: Málaga, Valencia, and Alicante
*Northern coast: Cantabria and Asturias

Significant increases of 7% to 10% were also recorded in provinces surrounding Madrid, including Toledo, Segovia, Guadalajara, and Ávila, driven largely by capital-city spillover.

Short-Term Supply-Demand Imbalance

While construction permits rose 19.4% in Q1 2025, the number of completed homes decreased by 7.9%, reflecting the lingering effects of the pandemic on construction activity and delivery timelines.

Financing Conditions and Mortgage Risk Remain Stable

According to the Bank of Spain, only 10.9% of mortgage loans in Q1 2025 financed more than 80% of a property's value — well below the 16% average seen during the 2004–2007 housing boom.

The national mortgage effort ratio remains stable at 34%, considered a reasonable level. However, housing affordability is under high pressure (above 40% of average household income) in:

*Málaga (57.7%)
*Balearic Islands
*Madrid
*Cádiz

Regional Price Trends: Autonomous Communities

The regions showing the strongest year-on-year price growth:

*Above 10%: Madrid, Balearic Islands, Cantabria, and Asturias
*Between 9% and 10%: Valencia Region, Canary Islands, Andalusia, and Catalonia
*Cantabria, Madrid, Asturias, and Balearic Islands also lead quarter-on-quarter increases, ranging between 2% and 4.7%

Historic Nominal Highs: Madrid and the Balearic Islands have reached all-time nominal price highs. However, adjusted for inflation, prices are still below their real historic peaks: -24% in Madrid and -9% in the Balearics.

Provincial Breakdown: Madrid Leads the Rankings

In Q2 2025, provincial home price variations ranged from -1.9% to +16.9% year-on-year. The provinces with the highest price increases:

*Madrid: +16.1% YoY / +4.4% QoQ
*Balearic Islands: +14.4%
*Santa Cruz de Tenerife: +14.2%
*Cantabria: +14.1%
*Málaga: +13.5%
*Asturias: +11.6%
*Valencia, Toledo, Alicante: +10.5%

By contrast, Zamora (-0.8%) and Córdoba (-1.3%) posted minor annual price declines.

In total, 24 provinces recorded quarterly price increases above 2%, with Santa Cruz de Tenerife, Cantabria, Madrid, Granada, Asturias, and Toledo exceeding 4%.

Key Insight: Santa Cruz de Tenerife has also reached a nominal record, but its real (inflation-adjusted) value remains 21% below its peak from the early 2000s.

Conclusion: Real Estate Investment Opportunities in High-Demand Markets

Spain’s residential market is characterized by limited supply and strong demand, driven by a robust economic recovery and stable financing conditions. Investing in prime locations such as Madrid, the Balearic Islands, or the Mediterranean coast remains a reliable strategy for capital appreciation and long-term returns.