Spanish Property in 2025: Between Boom and Uncertainty

The Spanish property market ended 2024 on an impressive high, with prices up 11.2% and rental rates at record levels (up 11.5%).

However, behind this picture of rapid development there are contradictions that are generating both optimism and anxiety among investors and buyers. What awaits the market in 2025?

The key event will undoubtedly be the final closure of the Golden Visa program on April 3, 2025. This program, which provided residency in exchange for investment in real estate, attracted a significant flow of foreign buyers. Its abolition will undoubtedly have an impact on the market. However, the extent of this impact is still a matter of debate.

Some experts predict a significant decline in demand, especially from investors from China and Russia, who have been active in the program. Others believe the impact will be less significant, as other factors, such as the attractiveness of the Spanish lifestyle and relatively affordable (compared to other European countries) property prices, will remain attractive to foreigners.

Prime Minister Pedro Sanchez's statements about the possible introduction of a 100% tax on transactions with foreigners have caused a wave of discussions. So far, these statements are rather populist in nature, aimed at calming the local population who are unhappy with the rise in housing prices. However, the very fact that they have appeared indicates growing tension in the market and the authorities' readiness to intervene in it more actively.

A complete ban on the sale of real estate to foreigners is unlikely - this would seriously damage the Spanish economy. However, tightening the regulation of transactions with non-residents is quite possible, which could result in an increase in the tax burden or the introduction of additional requirements for buyers.

The Spanish property market in 2025 will be characterized by greater uncertainty than in previous years. The abolition of the Golden Visa and potential tightening of regulations on transactions with foreigners may lead to some decline in demand. However, the high attractiveness of Spain as a place to live and vacation, as well as the relative affordability of real estate compared to other European countries, will restrain the decline in the market.

A slowdown in price growth is expected, but not a sharp fall. The problem of undersupply and rising rental rates will remain pressing challenges for the market. Finally, the fight against "okupas" and the regulation of short-term rentals will determine further developments in the Spanish property market. Investors and buyers are advised to carefully weigh the risks and seek experienced professionals to make informed decisions.