According to published data, the average price of residential real estate in Spain reached a historic high in 2025. By the end of the third quarter, the national average price increased by 6.2% year-on-year. Growth was stronger in major cities, with Madrid up 7.8%, Barcelona up 6.9%, and Valencia up 6.1%.

The national average price reached €2,250 per m², compared with €4,100 per m² in Madrid and €3,850 per m² in Barcelona.

Investment activity remains solid, although yields are gradually declining. The average gross rental yield nationwide stands at 3.9%, which is 0.3 percentage points lower than in 2024. In Madrid, the yield is 3.4%, while in Barcelona it is 3.5%, reflecting the widening gap between price growth and rental dynamics.

Rental rates increased by 4.1% year-on-year. In capital-city areas, rents range from €15 to €22 per m², while in mid-sized cities they range from €9 to €13 per m². The share of new-build units available for rent remains below demand levels.

The number of transactions involving foreign investors increased by 11% compared with 2024. The main sources of capital are the United Kingdom, Germany, France, and the United States. Foreign buyers account for 38% of transactions in the premium coastal segment and 15% nationwide.

The report also notes that the gap between new-build and existing housing continues to widen. The average price of new developments exceeds the secondary market by 23%. In the new-build segment, the average price stands at €2,950 per m², while the secondary market averages €2,390 per m².

Construction activity remains stable. In 2025, approximately 86,000 new units are scheduled for completion, broadly in line with 2024 levels. However, the number of building permits has declined by 4.7%, indicating a potential tightening of supply.

According to International Investment, the combination of rising prices, moderate rental growth, and yield compression continues to shape the investment profile of Spain’s residential real estate market.

Commentary from M24 Investment Division:

In Spain’s residential real estate market in 2025, further price increases are recorded alongside declining gross yields. Property values in major cities continue to rise faster than rental rates, resulting in margin compression. Foreign capital remains a significant driver of demand, while stable construction volumes are accompanied by a moderate decline in permits, which may constrain supply in the medium term.