Spanish housing prices jump €80,000 in one month

Spanish housing prices jump €80,000 in one month

Is it a good time to buy? The question, repeated endlessly in recent years, is back on the table. Data from buyers and sellers paint a market unlike 2008: insufficient construction, scarce supply, and intense demand despite credit constraints. In this context, prices keep rising. For example, in a new-build development in Málaga, the price of a three-bedroom apartment jumped from €437,000 to €510,000 in just one month, according to a buyer who attended a sales appointment. This story repeats elsewhere: near Barcelona, a property priced between €400,000 and €500,000 received 25-30 visits without a single offer, says another participant. The market is tense, and signs of exhaustion are multiplying.

Supply fails to meet demand, prices spiral

The shortage of new builds is the biggest factor straining the market. In areas like Málaga, lack of construction and pressure from foreign demand have driven prices up. A buyer reports that in a development in the El Cónsul district, the starting price for a three-bedroom unit was €437,000, but a month later, the agent informed him the cheapest cost €510,000 excluding VAT. "Prices have been adjusted," they justified. That adjustment, of €73,000, equates to a 17% increase in four weeks. It is not an isolated case: in another area, a similar flat went from €120,000-€130,000 before the pandemic to €250,000 now, according to testimony. Supply is so limited that sellers feel comfortable with aggressive hikes, antiestéticaring no loss of buyers.

Meanwhile, demand does not stop. Despite rising interest rates and the Euribor making mortgages more expensive, the need for housing remains. Immigration, bringing people who need accommodation, adds extra pressure, some participants argue. Some analyses suggest this migration flow could reverse in the medium term, but in the short term, demand holds firm. The result is a market where prices only know how to go up.

Why is the market different from 2008?

Unlike the 2008 real estate bubble, today there is no over-construction nor mortgages granted above 80% of the property value, participants say. In 2008, they recall, loans were given for 120% and building never stopped. Now, the situation is the opposite: new housing production is insufficient and credit is more restrictive. This does not prevent prices from rising, but it changes the nature of the risk. The current market is not inflated by a credit bubble, but by a structural scarcity of supply, according to this view. Those expecting a quick correction may be disappointed.

The comparison with 2008 also fails in another aspect: then, many buyers had precarious and temporary jobs, yet still accessed mortgages, some remember. Today, buyers usually have more stable incomes, but face prices far exceeding their savings capacity. One participant calculates that a home bought in 2025 in a new build cost €130,000 more than the same development in its first phase, three years earlier. That differential is impossible to keep up with for any average salary.

Euribor and mortgages: a real brake?

The rise in Euribor has made variable-rate mortgages more expensive, but has not cooled demand. Those buying to live, not to speculate, absorb the cost. One participant sums it up: "I bought to live, not to speculate." Others, however, see rising rates as a signal that the market should correct. The reality is that Euribor has moved from negative rates to levels above 3%, and housing, far from falling, has continued to rise, some recall. This has exposed those who predicted a crash when rates rose.

The higher cost of credit has also changed the buyer profile. Larger down payments are required and monthly installments are higher. But supply remains so scarce that sellers do not need to lower prices. In some cases, they even ask for upfront amounts just to make an offer: €10,000 to start negotiations, according to a buyer. This practice, unthinkable a few years ago, shows how much the market favors the seller.

Housing as an investment haven

The lack of alternative investments has turned housing into a safe haven, participants argue. With interest rates still moderate historically and inflation eroding savings, many investors seek protection in bricks and mortar. This adds pressure to an already strained market. Investment funds and companies also buy homes to rent out, reducing supply available for sale, according to some. Participants propose limiting fund purchases or equalizing their taxation to hotels, but these measures have not materialized.

The result is a market where those with money buy, and those without pay ever-higher rents. Housing has become a safe-haven asset, with consequences for those who just want a roof. The tension between residential and investor use is at the heart of the problem.

What will happen to prices?

No one has a crystal ball, but indications point to the upward trend continuing until supply increases. New housing construction remains hampered by land scarcity, bureaucracy, and rising material costs, participants note. Without a change in these conditions, prices will hardly fall. Some analysts believe the market is nearing a peak, but others recall we have heard the same for years while prices keep rising.

The situation is especially harsh for young people, who see housing slipping out of reach. One participant expresses it bluntly: "It's a shame the current situation for young people." The gap between wages and prices widens, with social and economic consequences beyond the real estate market.

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In the end, the question remains unanswered. Buying today is expensive, but waiting might be worse. Data do not invite optimism for those seeking a correction, and supply shortages do not seem likely to resolve soon. So, if anyone has the magic formula, share it. Because the market, for now, gives no respite.