Spanish property prices still sky high

Property prices on Spain’s islands are now almost 8% higher than they ever were during the property boom of the mid-2000s.

The price of housing in Spain, both new and used, started 2025 with a year-on-year increase of 6.6%, according to data from the appraisal firm Tinsa. In the Canary Islands and the Balearics this increase was 11.5% and is 7.9% above its historical highs, during the so-called real estate boom.

Tinsa clarifies that in real terms, discounting the effect of inflation, the increase in the price of housing in January for the whole country was 3.6%.

However, it is the islands and coastal areas that show the greatest year-on-year variations in prices, with 11.5% in the islands and 9% on the Mediterranean coast.

These tourist regions are followed by the large urban centres. The price of housing rose by 6.1% in the capitals and large cities, 4.5% in metropolitan areas and another 6.1% in the rest of the municipalities.

Tinsa claim that one of the reasons for the buoyant market, especially in the cities, is that employment remains at high levels, supporting the solvency of households, which have reestablished their purchasing power over the last year and largely overcome the cost-of-living crisis.

Other factors include a fall in interest rates and the easier access to credit.

Separate data from the College of Registrars also states that property prices in the Canaries are now 12.5% higher than in 2007, when they reached their previous maximum level before the bubble burst.

The Registrars indicate that Canarian property is now the fifth most expensive in Spain after Madrid, Catalonia, the Balearics and the Basque Country.

14.5% of all property purchases in the last quarter of 2024 were by foreign buyers, with the Canaries the third-most popular region. The British remain at the head of the foreign purchasers’ league at 8.57%. They are followed by the Germans, the Dutch and the Moroccans.