Buying new buildings in Spain is becoming increasingly difficult—prices continue to rise rapidly. Many experts note that they are approaching historical highs recorded during the boom in the real estate market in 2007.

According to the latest report of the Appraisal Society, the price per square meter of new homes in Spain in the second quarter of this year amounted to €2809. This figure exceeded the €2800 per square meter mark for the first time since 2008. Analysts predict that by the end of the year, the price could reach €2873 per square meter, very close to the record €2905 per square meter recorded at the end of 2007.

Regional characteristics

All provincial capitals have been affected by the price increase, with the situation varying from region to region. The highest price increases were recorded in Málaga and Palma de Mallorca, where prices rose by 8.2% over the last year. The highest average price per square meter is registered in Barcelona, at €5000 per “square”. It is followed by Madrid (€4269) and San Sebastián (€4185). These are the only three capitals in Spain where the average price per square meter exceeds €4,000.

On the other hand, the most affordable prices remain in Ciudad Real (€1286 per square meter), Caceres (€1293), and Badajoz (€1307).

According to experts, the main reason for the rise in new-build prices is a shortage of supply compared to rising demand. After the end of the pandemic, demand for real estate has increased significantly, and new buildings have become especially popular. In addition, many people have managed to save the necessary amount of money, and this has increased their interest in real estate as an investment.

Forecasts and challenges

Despite rapid price growth, analysts predict a slowdown in this trend. Price growth is expected to end the year at 5.2%, reaching €2873 per square meter. However, there are a number of factors that could affect demand, such as economic instability and tighter financing conditions.

Construction costs also continue to rise, putting further pressure on prices. Optimism within the construction sector is declining.