Housing prices in Spain are not only rising, they are accelerating.

That is the real headline of 2025. Over the past few quarters, year-on-year growth has exceeded 10%, reaching 12.1% in the third quarter, more than double the European average of 5.4%. Among major European economies, Spain is currently experiencing the fastest price acceleration.

In Germany and Italy, growth remains below 4%. In France, prices are nearly stagnant. Finland is even seeing slight declines. Outside the European Union, both the United States and the United Kingdom show signs of moderation. By contrast, the Spanish market is once again expanding at a pace reminiscent of 2005, during the peak of the previous housing bubble.

According to Spain’s Ministry of Housing, the average price of free-market housing has surpassed €2,150 per square meter, exceeding the levels recorded in 2008 before the financial crisis. Data from the General Council of Notaries show slightly lower figures — around €1,900 per square meter — but confirm the same trend: since 2014, housing prices have risen by 54%, while overall inflation has increased by 27%. In other words, housing has become twice as expensive as the general cost of living.

The underlying issue is structural supply shortage. The Bank of Spain estimates a deficit of around 700,000 homes, and warns that, at current production and demand levels, this gap could widen by an additional 100,000 units each year. This imbalance does not only drive prices higher; it also poses risks to employment, labour mobility and broader economic growth.

Proposed solutions vary and sometimes conflict: increasing construction, accelerating renovation projects, restricting short-term rentals, taxing vacant homes or limiting multiple property ownership. Yet public opinion reveals a common perception: nearly 80% of citizens believe the current public housing stock is insufficient and demand stronger institutional intervention.

Spain’s housing market stands at a delicate point. While there are no clear signs of excessive credit growth comparable to the pre-2008 period, demand pressure against a rigid supply base is evident. The central question is not whether prices have risen — that is indisputable — but how long this acceleration can continue without triggering deeper consequences for housing accessibility and economic stability.

Ultimately, the challenge lies not merely in containing prices, but in correcting the structural imbalance between supply and demand. Until that adjustment occurs, upward pressure is likely to remain a defining feature of the Spanish housing market.