Spanish house prices climb 15.4% in May
The price of both new and second-hand housing in Spain rose by 15.4% in May, matching the annual rate recorded the previous month, according to figures released this Friday by valuation firm Tinsa. The highest increase was once again seen in the Canary Islands, where prices surged by 19.3%.
With this latest rise, which outpaces inflation, house prices have accumulated a 14.9% increase so far this year. This growth is taking place against a backdrop of insufficient housing supply to meet rising demand, which is putting upward pressure on prices and worsening accessibility issues.
Regional breakdown of price rises
Following the Canary Islands, the Mediterranean coast registered a price revaluation of 17.6%, while metropolitan areas saw an increase of 16.8%. Capital cities and large towns recorded a 15.4% rise, and the rest of the municipalities saw a more moderate increase of 10.3%, the company stated in a press release.
Compared with the previous month, April, house prices in May grew by 1.3% on an annualised basis. Metropolitan areas recorded the largest monthly price increase at 2.1%, followed by the Mediterranean coast (1.8%), capital cities and large towns (1.3%), and the Canary Islands (0.5%). In the remaining municipalities, housing became just 0.2% more expensive.
Employment resilience and market moderation
Tinsa highlighted the resilience of the labour market and the continued solvency of households. However, the firm noted that property sales have moderated slightly in the first quarter of the year.
According to Cristina Arias, director of the Tinsa by Accumin Research Department, this situation can be explained by the market’s absorption of past interest rate cuts, which had not yet fully concluded by early 2025, as well as uncertainty over inflation and mortgage costs stemming from the war in Iran since late February. Even so, she noted that mortgage volumes held up in the first quarter, and property sales continue to show robust levels above the historical average.
Comparison with 2007 housing bubble peak
In May, the price of new and second-hand housing in Spain was just 1% (in nominal terms) below the peaks recorded in 2007, at the height of the property bubble. Prices have risen 75.4% since the summer of 2015, when they hit their lowest point following the property crash. However, when adjusted for inflation, prices remain 34% below those historic highs.
The Canary Islands surpassed their 2007 prices by 24.8% in May. Capital cities and large towns (0.8%) and metropolitan areas (0.4%) also exceeded their pre-crash levels in nominal terms. Once inflation over this period is discounted, all three groups remained below the prices seen during the property boom.
Compared with the lows recorded after the bubble burst, the greatest price increases have occurred in the Canary Islands (97.2%), followed by metropolitan areas (86.2%) and capital cities and large towns (85.1%).
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