Half of Spaniards fear new housing bubble

52% of Spaniards see another bubble: credit doesn't trinc

According to a second-half report by portal Fotocasa, 52% of Spaniards believe a new housing bubble is approaching. This figure comes as purchase prices hit highs in much of the country, clashing with the consultancy's own view: its Head of Studies maintains that mortgage conditions are not loosening and household savings remain stable, meaning the ingredients for a classic bubble are absent. What exists, she says, is high activity against scarce supply, pushing prices up.

The debate around that 52% isn't about whether prices are rising, but whether they can continue without cheap credit behind them. And here, opinions are divided.

What the Fotocasa report says

The study reveals several data points depicting a tense market, though less euphoric than in 2007. The percentage of Spaniards worried about mortgage conditions when buying has dropped seven points, from 78% to 71%. The sense of ownership remains deeply rooted (70%, down from 73%), but is receding. It grows with age: only 47% of the youngest group (18-24) share this view, compared to 82% of those aged 55-75.

One statistic best explains market pressure: 70% of respondents believe paying a mortgage makes more financial sense than renting, up from 64% the previous year. Support for buying as a good investment stands at 68%, one point higher. The idea that renting is "throwing money away" dips slightly, from 52% to 51%. Backing for the Housing Law falls from 30% to 26%.

No easy credit, no bubble: the argument defusing the alarm

The most repeated thesis among those dismissing the bubble scenario is that without easy credit there is no solvent demand, and therefore no bubble. This is the line defended by Fotocasa itself and echoed by those viewing the market through a historical lens. A circulating example: price per square meter in Catalonia was €2,330 in February 2006 and €2,474 in October 2024. In nominal terms, it has barely risen 6% in nearly two decades, far from the explosion experienced then.

Another argument adds weight: money isn't worth what it was in 2008. With accumulated inflation, current prices aren't comparable to those of the previous bubble. Housing has shifted from an accessible asset to a luxury product, but that isn't the same as a bubble.

The crash others predict: factories closing and €25k salaries

Against this reading, some argue the crash is already here and just needs to be felt. The argument rests on the gap between prices and wages: in specific areas, factories are closing, salaries are below €25,000, and apartment prices reach €300,000. The conclusion is that the market holds as long as someone pays, and when the music stops, whoever is left holding properties pays for the party.

The most repeated prediction points to 2025 as the year of the crash, with particular impact on coastal and tourist zones, where foreign buyers have pushed prices to double in ten years in some markets. The musical chairs comparison is recurrent: while the music plays, everyone dances.

The demographic factor: more population, less housing built

Part of the analysis focuses on demographics. It is argued that population growth driven by immigration coincides with construction hitting lows, maintaining price pressure. Scarcity of supply in major cities and coastal areas, combined with more single-person households and high-purchasing-power buyers, would explain why prices rise even as average wages don't keep pace.

The debate on this point is tense and often drifts into positions on migration policy that go beyond economics. Strictly in market terms, the question is whether this demand would hold during an economic crisis. Some argue immigrant demand is more mobile than native demand and could retreat faster in a shock.

Housing as inheritance and the sense of ownership

The report highlights that the sense of ownership increases with age: 47% of younger people share this sentiment, versus 82% of older groups. Housing as a legacy weighs more heavily in the mindset of those who already own one. Meanwhile, viewing purchase as an investment is similarly split between young and old: 64% in the 18-24 group and 69% in the 55-75 group.

This deep-rooted attachment explains why the market resists. It also explains why each generation locked out of homeownership views the market with more suspicion. The gap between owners and non-owners widens, along with the perception that the system is broken.

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The exact point where analysis stalls is credit. If credit doesn't loosen, the bubble doesn't form. If it does, the 52% will be right. No one knows which will happen first.