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Local Spain
6 days ago
- Business
- Local Spain
Should I buy a property in Spain now before it gets too expensive?
The number of people buying homes in Spain currently is skyrocketing. In fact, the country's just had the best month of May since 2007 in terms of property purchases, with 40 percent percent more homes sold than for the same month last year. Not exactly news one would expect given Spain's widely reported housing crisis. So what does this mean for foreigners - whether resident or non-resident - who have been considering buying a property in Spain? Should you rush or should you wait? Of course, committing to buying a property depends on your individual circumstances and your finances, but the general advice from market analysts is that if you want to buy a home, you should do it sooner rather than later. In a nutshell, banks' mortgage conditions are currently good and the data points to continuous house property price and rent increases throughout 2025 and beyond. Take the price evolution graph of Spain's main property search engine Idealista, which shows that the average price per square metre in June 2025 was €2,438. So a 100sqm flat in Spain costs €243,000 on average. A month earlier, in May 2025, it was 2 percent cheaper, meaning that a home is around €4,860 more expensive now. A year ago in June 2024, it was 14 percent cheaper, an incredible €34,000 less than it is now. In this context, it's no surprise that many people in Spain wants to get in there quick before prices increase too much. The latest data shows that Spain recorded the third-highest rise in housing prices in the entire Eurozone in the first quarter of 2025, with an increase of 12.3 percent, only surpassed by Portugal (+16.3 percent) and Croatia (+13.1 percent). Rents are climbing at a similar rate, higher still in the popular spots and main cities, meaning that people who are on the fence about buying a Spanish property are considering more than ever whether to take the leap and buy a home. In this context, it's no surprise that fear is driving many Spaniards to buy. Just as inflation influences what and how much consumers buy at the supermarket, expectations for the housing market spur people to purchase property because they anticipate it will only get worse. But there are other factors at play too. "There are several factors that explain the current strength of housing demand, including growth in gross disposable income, strong foreign demand, positive migration flows, the favourable financial situation of households, and lower interest rates," Judit Montoriol, chief economist at CaixaBank Research, told Business Insider. Why Spain's current mortgage conditions mean now is a good time to buy Firstly, the situation has changed in recent months thanks to a decline in the Euribor, which is returning to levels not seen since autumn of 2022. This means much better mortgage interest rates are available and better conditions too. Spanish banks now offer a TIN (Nominal Interest Rate) under 2.5 percent and financing up to 90 percent. With the Euribor hovering around 2 percent, the mortgage market is seen as much more attractive now and promises to become even more so in the coming months. Euribor is the interest rate most often used to work out mortgage payments in Spain and to calculate both variable and fixed rates. Why future property price rises should spur people to buy now in Spain Experts believe that house prices will continue to grow at a steady rate throughout 2025. Caixabank forecasts the rise will be 7.2 percent, Bankinter believes it will be 5 percent, American credit rating agency S&P puts it at 4.7 percent. One way or another, the average property in Spain is likely to cost between €10,000 and €20,000 extra (if not more) in 2026 than in 2025. This is mainly due to the increase in demand for housing, limited supply and an insufficient amount of new construction, which will keep prices high. And although there are signs of a property bubble developing in some Spanish cities, there isn't the same set of circumstances which precipitated prices to come crashing down as in the case of the 2008 financial crisis. Conclusion The general advice from market analysts that any savings you'll make from a better mortgage rate could be outweighed by increases in property prices. This means waiting could cost you more if you're planning on holding out for better mortgages. As rental prices are also continuing to rise, it might be worth spending the money on going towards a mortgage instead of increased rents anyways. As with everything though, it's important though to think about your situation and what is best for you. It will also make a difference depending on where in the country you want to buy. If you're buying in a big popular city, where prices have increased the most, you may want to act sooner, but if you're buying in rural countryside it may not matter so much as prices may not rise as fast.
Local Spain
03-07-2025
- Business
- Local Spain
Why are fewer American tourists visiting Spain this summer?
American tourism in Spain is slowing down after a strong post-pandemic period, causing experts to worry that the shortfall may negatively impact the Spanish economy in 2025. According to a recent tourism sector report by CaixaBank Research, titled Uncertainty and American Tourism, it is estimated that the downturn could hit Spain's tourism GDP growth by as much up to one percentage point this year. In a context in which the travel industry is slowing overall, going from 6 percent in 2024 to 2.7 percent, in 2025, the slowdown in the American market stands out as a 'relevant' factor to take into account in terms of the Spanish market, according to the bank's findings. The report points to several possible explanations, including a weaker dollar and global economic instability caused by President Donald Trump's trade policy as possible reasons causing Americans to stay home. 'The appreciation of the euro against the dollar, the slowdown of the U.S. economy, and an increase in political and economic uncertainty appear to be behind this change in trend,' the report states, pointing to November 2024, when Donald Trump returned to the White House for a second term, as a turning point in the longer-term trends. However, it should be noted that the 'slowdown' refers to tourism growth among Americans going from exceptionally fast to slower but still growing overall. 'Passenger arrivals from the US slowed abruptly, going from 17.5 percent year-on-year growth in the first 10 months of 2024 to just 2.3 percent between November 2024 and May 2025,' the report says. American tourists in Spain spend well above average for foreign tourists in the country. Last year, they accounted for 4 percent of the nearly 94 million foreign tourists but 7.1 percent of overall spending. In cities such as Barcelona, they already represent a large group of foreign travellers, although their prominence has been growing across the country in recent years: since 2019, arrivals of Americans travellers increased by 28.3 percent, compared to 12.3 percent of total international arrivals. However, CaixaBank points out that spending with US bank cards in Spain has gone from growing by 17 percent year-on-year between January and October 2024 to falling by 2.2 percent between November of that year and May 2025. In contrast, total spending with foreign cards slowed more moderately, with an increase of 11.1 percent between January and October 2024 to 8.5 percent between November and May. The research also identifies the areas of Spain most affected by a drop in American visitors, pointing to an urban preference among tourists coming from the States: 'If we breakdown Spanish municipalities into urban (more than 30,000 inhabitants) and rural, and between coastal and non-coastal, we observe that the influence of American tourism is particularly significant in non-coastal urban municipalities (14.7 percent), around Barcelona and Madrid, according to the latest analysis by Turespaña. In rural municipalities, both coastal and non-coastal, the influence of American tourism is slightly above 4 percent.' Nevertheless, David César Heymann, economist at CaixaBank Research and author of the report, points out that the number of American travellers to Spain grew much more in 2024 than in Europe as a whole (22.3 percent compared to 7.3 percent), which is why the slowdown is now more pronounced. From January to April this year, Spain received 25.6 million international tourists, 7.1 percent more than in the same period in 2024. Year-on-year growth at that time was much higher, at around 18 percent. Average spending per tourist, an indicator used to measure the value of visitors, has barely increased by 2 percent in the first four months of the year, well below the 7.1 percent increase experienced last year.
