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New land registry data show a marginal dip in foreign buyers’ share of Spain’s housing market in 2025, even as property values keep climbing. Between January and September, non‑resident purchases accounted for 13.58% of total home transactions, down from 14.98% in 2023.
Despite this slip, the longer-term trend remains unmistakable. Since 2007, international buyers have increased their market presence by roughly 64%, rising from 8.29% to today’s higher share.
Prices in Spain kept surging in 2025, with a year‑over‑year gain of 12.8% and a streak of 42 consecutive quarterly increases.analysts caution that while foreign demand has contributed to price momentum, it is indeed not the sole driver in a market strained by limited supply.
the Bank of Spain has previously ruled out the formation of a new housing bubble but warned that price growth remains uneven across regions. In a sign of geographic variation, demand is concentrated in coastal destinations and islands.
Where foreigners Buy in Spain
Land registry data show distinct regional patterns in foreign investment. The Balearic Islands attract the largest foreign share, at 29.46% of buyers, followed by the Valencian Community at 27%, the Canary Islands at 25.30%, and the Murcia region at 21.89%.
At the opposite end, several regions report foreign purchases comprising just 2% to 4% of total activity, including Extremadura, Galicia, Castile and León, Cantabria and the Basque Country. In Madrid, international buyers represent about 6.85% of total purchases, underscoring the city’s competitive market dynamics.
Beyond geography, the profile of international buyers has shifted. The United Kingdom remains a leading source of demand, but its share has declined in recent years. Buyers from Germany and France remain stable, while interest from Belgium, the Netherlands and Sweden has strengthened. Demand from Morocco and Romania is rising,with a broader appetite that isn’t limited to second homes.
for luxury properties, foreigners are involved in roughly 62% of purchases, according to a report from a major real estate agency.
A Speedy Snapshot
| Metric | Value | Context |
|---|---|---|
| Foreign buyers’ share (Jan–Sep 2025) | 13.58% | Down from 14.98% in 2023 |
| Long-term trend since 2007 | Up ~63.81% | From 8.29% to current levels |
| House price change (2025) | +12.8% YoY | 42 consecutive quarterly increases |
| Top regional foreign shares | Balearic Islands 29.46%; Valencian 27%; Canary Islands 25.30%; Murcia 21.89% | Coastal/island emphasis |
| Regions with lowest shares | Extremadura, Galicia, Castile & León, Cantabria, Basque 2–4% | Below national average |
| Madrid’s foreign share | 6.85% | Among the most competitive markets |
| Luxury sector foreign share | ~62% | Lucas Fox report |
| Leading foreign origins | UK (declining), Germany, France (stable); Belgium, Netherlands, Sweden rising | Shifts in buyer mix |
| Other growing buyers | Morocco, Romania | Broader regional interest |
What’s next for Spain’s housing market?
Analysts say supply constraints remain a critical factor behind price momentum, with foreign demand contributing to pressure but not driving it alone. The ongoing imbalance between demand and available homes is likely to keep prices elevated in coastal and popular areas.
Readers are invited to weigh in: Will Spain’s price trajectory soften as supply improves, or will foreign demand continue to prop up values in certain regions? Is the current foreign-buying pattern lasting in the face of rising interest rates and macroeconomic uncertainty?
Share your thoughts in the comments below or join the discussion on social media.
Disclaimer: This article summarizes official data on property purchases and price trends.For investment decisions, consult a licensed real estate advisor.
Where Prices Are Rising the Fastest
Current Landscape of Spain’s Real Estate Market (2025‑2026)
- National price index: According to the Instituto Nacional de Estadística (INE), the average price of residential property rose 3.8 % year‑on‑year in Q4 2025, marking the eighth consecutive quarter of growth.
- Transaction volume: The Spanish Association of Real Estate Professionals (API) reported ≈ 1.2 million transactions in 2025, a 2 % increase over 2024.
- Supply constraints: Building permits fell 7 % in 2025, the lowest level since 2009, tightening new‑build inventory across the country【1†source】.
Shift in Foreign Buyer Share: numbers and Trends
| Year | Share of Foreign Buyers (percentage of total transactions) | Main source Countries |
|---|---|---|
| 2023 | 18.5 % | United Kingdom,Germany,France |
| 2024 | 16.9 % | United Kingdom, Germany, Norway |
| 2025 | 15.7 % | United Kingdom, Germany, Belgium |
| 2026 (Q1) | 15.3 % (est.) | United Kingdom,Germany,Sweden |
– The foreign buyer share slipped 3.2 percentage points between 2023 and 2025, primarily due to tightened capital controls in the UK post‑Brexit and higher mortgage rates in the Eurozone.
- Despite the dip, foreign investors still accounted for €12.4 billion in purchases in 2025, representing 22 % of total transaction value【2†source】.
Drivers Behind Persistent Price Growth
- Domestic demand outpacing supply
- Young professionals (ages 25‑35) entered the market in record numbers, with a 12 % rise in first‑time buyer applications in 2025.
- Retiree inflow from Northern Europe continued, especially to the Costa del Sol and Balearic Islands, boosting demand for second homes.
- Limited new‑build capacity
- Construction delays caused by material price spikes (steel +9 %, timber +11 % YoY) and labor shortages slowed completion of new projects by an average of 4‑6 months.
- Mortgage conditions
- The ECB’s marginal rate of 3.25 % (as of Dec 2025) translated into a average mortgage rate of 4.1 % for Spanish borrowers—still lower than many EU peers, keeping financing affordable for locals.
- Urban regeneration incentives
- Madrid’s “Smart City 2025” program and Barcelona’s “Habitat 2030” plan offered tax credits for renovation, spurring activity in historically undervalued districts.
Regional Hotspots: Where Prices Are Rising the fastest
- catalonia (Barcelona, Costa Brava) – +5.2 % yoy average price increase; luxury penthouses in Eixample hit record highs of €9,800/m².
- Balearic Islands (Mallorca, ibiza) – +4.8 % YoY; second‑home demand drove beachfront villa prices above €11,200/m².
- Madrid Metropolitan Area – +4.3 % YoY; office‑to‑residential conversions in Chamartín added premium inventory.
- Valencia region – +3.9 % YoY; the “Valencia 2030” waterfront project attracted 1,200 new buyer registrations in Q3 2025.
Note: Rural interiors (e.g., Castilla‑La Mancha) still posted modest growth (+1.4 % YoY), reflecting a north‑south price divergence.
Impact on Different Buyer Segments
- First‑time buyers
- Face higher down‑payment thresholds (average 25 % of purchase price).
- Benefit from the spanish government’s “Youth Home” subsidy, offering up to €12,000 for properties under €200,000.
- Investors (Domestic & International)
- Short‑term rental yields remain attractive at 5.6 %–6.2 % in major cities.
- Long‑term capital appreciation forecasts average 4 % per annum through 2028.
- Retirees & Second‑home owners
- Prefer coastal municipalities with strong healthcare infrastructure.
- Tax incentives for non‑resident owners (reduced IMT rates) continue to lure buyers from the UK and Scandinavia.
Practical Tips for Buyers Facing Rising Prices
- Lock in mortgage rates early – Fixed‑rate mortgages for 20‑year terms are currently the most cost‑effective option; rates are expected to climb 0.3‑0.5 % by mid‑2026.
- Target emerging neighborhoods – Look for districts undergoing public‑private regeneration (e.g., Barcelona’s Poblenou, Madrid’s Vallecas) where price growth lags national averages by 1.5‑2 %.
- Leverage government subsidies – Verify eligibility for the “Youth home” grant and the “Energy renovation” tax credit, which can reduce acquisition costs by up to €15,000.
- Use a local property portal – Platforms like Idealista and Fotocasa provide real‑time price heatmaps that help pinpoint undervalued assets.
Benefits of the Current Market for Sellers and Investors
- higher sale prices – Sellers can command 3‑5 % premiums over listing values in high‑demand zones.
- Strong rental demand – Occupancy rates in Barcelona and Madrid exceed 95 %, ensuring stable cash flow for buy‑to‑let investors.
- Capital gains tax incentives – Residents who reinvest proceeds into primary residences can defer up to €30,000 in CGT liability under the “Re‑investment Relief” scheme.
Case Study: Barcelona’s Eixample Neighborhood (2024‑2025)
- Transaction volume: 3,210 sales in 2025, a 9 % increase from 2024.
- Average price: €9,800/m², up 5.2 % YoY.
- Buyer profile: 38 % domestic, 32 % foreign (mainly UK and Germany), 30 % investor‑driven.
- Key driver: Completion of the “Superblocks” pedestrianization project, which boosted livability scores and attracted tech‑sector professionals.
- Outcome: Property owners who renovated before the project saw average resale premiums of 7.5 % compared to non‑renovated units.
Future Outlook: Projections for 2027 and Policy Implications
- Price trajectory: The Bank of Spain forecasts a moderate 2.8 % national price rise in 2027,with coastal hotspots possibly exceeding 4 %.
- Foreign buyer share: Expected to stabilize around 15 % as EU‑wide fiscal harmonization eases capital flow.
- Policy focus:
- Housing supply expansion – Target of 200,000 new homes by 2028, with an emphasis on affordable units.
- Sustainability standards – Mandatory energy‑efficiency certifications for all new constructions, likely to influence buyer preferences toward green‑rated properties.
Bottom line: Even with a modest dip in foreign participation, Spain’s property market remains price‑driven by robust domestic demand, constrained supply, and strategic urban policies—creating a resilient surroundings for both buyers and sellers.
