Spain has seen one of the sharpest increases in housing prices across the EU, with an eye-watering 12.3% annual rise recorded in the first quarter of 2025—more than double the average increase of 5.7% across the bloc, according to new Eurostat figures. The surge is fuelling public frustration and turning up the heat on policymakers to intervene before the system buckles.
A hot market, but not in a good way
The jump places Spain as the fourth highest in the EU in terms of house price growth, surpassed only by Portugal (16.3%), Bulgaria (15.1%) and Croatia (13.1%). In the eurozone context, that makes Spain the third worst in terms of affordability erosion, with only Slovakia (12.2%) and Hungary (12.1%) nearby on its heels.
Meanwhile, Finland remains the outlier in a chilled state: the only EU country where house prices fell over the same period (−1.9%). France and Luxembourg avoided fireworks, registering barely noticeable increases of 0.6% and 0.9%, respectively.
INE confirms the heat
Spain’s National Statistics Institute (INE) published similar findings earlier in June, showing a 12.2% increase in home prices between January and March. This is the steepest spike since before the 2008 financial crisis and marks the 40th consecutive quarter of rising prices—a full ten years of upward movement.
According to the INE, second-hand housing saw a 12.3% annual increase, its strongest growth since early 2007. New-build homes rose slightly less, by 12.2%—indicating that buyers are flooding both ends of the property market regardless of age or condition.
What’s fanning the flames?
Low interest rates, persistently high demand, tight supply, and increasingly accessible financing are all contributing to the surge. With mortgage costs coming down, the buyer pool has broadened—especially among foreign investors and Spaniards looking to jump into the market before prices rise further.
But while bullish news for owners and sellers, this dynamic is causing headaches for renters, first-time buyers, and younger people hoping to stay in their own cities.
Public pressure for intervention
No surprise, then, that housing is no longer a slow-burning issue—it’s now on full boil. A recent survey by the CEO (Centre d’Estudis d’Opinió) found that 75% of Catalans are in favour of limiting the number of tourist flats and regulating rents more aggressively. Housing has become the number one concern in cities like Barcelona, where locals increasingly feel priced out by international demand and speculative development.
Brussels joins the chorus
The European Commission has also taken notice. In June, EU economic advisors urged Spain to take “decisive action” to tackle what they labelled a “housing shortage”, which disproportionately impacts young people and vulnerable households.
Their recommendations included unlocking public land for development and boosting investment in social and affordable rental housing. “Expanding the stock of public and affordable rental housing will increase availability,” read a key suggestion.
Some progress, but not fast enough
In Tarragona, some green shoots are on the horizon: the city is set to deliver its first batch of affordable rental homes in the new Ponent neighbourhood by September 2026. But projects like this remain the exception, not the rule.
With demand running hot and housing development crawling, many question whether government promises and long-term planning will be enough to calm the market and ease the burden faced by ordinary households.
