The Spanish property market is showing a curious mix of records and slowdowns. In the third quarter of the year, foreign buyers accounted for 16.05% of all home sales, the highest share since records began, according to the College of Registrars. In absolute terms, that meant more than 26,300 transactions, with over half (54.7%) coming from EU citizens and a further 17.8% from the rest of Europe.
British buyers led the pack, making up 7.5% of all foreign purchases, followed by Moroccans at 6.4% and Dutch at 5.8%. The pull of the Mediterranean and the islands was particularly strong: the Balearic Islands saw 37.2% of sales go to foreigners, and the Valencian Community 30.4%. No other region exceeded 30%.
Prices keep climbing, but pace slows
The residential market continues to see upward pressure on prices. The College of Registrars' Repeat Sales House Price Index rose 15.8% year-on-year in the third quarter, and 5.2% quarter-on-quarter, pushing it to a new all-time high. The average price per square metre reached €2,512, with existing homes at €2,462 and new builds at €2,701.
Yet the pace of growth is moderating. On a quarterly basis, the average price increase was just 1%, and 9.3% compared with the same period last year. Regional disparities remain stark: Madrid leads with an average of €4,565 per square metre, closely followed by the Balearic Islands at €4,502. The Basque Country (€3,693), Catalonia (€2,989), and the Canary Islands (€2,850) round out the top five.
Among provincial capitals, San Sebastián tops the list at €6,662 per square metre, ahead of Madrid (€5,597), Barcelona (€5,124), Palma (€4,408), and Bilbao (€3,877).
Sales and mortgages decline for third quarter
Despite these price records, activity is cooling. Home sales fell 5.9% year-on-year in the third quarter, and 2.3% compared with the previous quarter, marking three consecutive quarters of declines. Between July and September, 164,148 sales were recorded, the lowest volume in nine quarters. New builds saw 34,611 transactions, down 0.9%, while existing homes dropped 2.6% to 129,537. Declines were widespread, affecting ten autonomous communities and 27 provinces.
Mortgage financing followed a similar trend. Some 124,145 home mortgages were registered in the third quarter, a 3.9% quarterly drop, equivalent to 75.6% of all sales. However, over the last twelve months, 519,388 mortgages were taken out, 6% more than in the previous year. Andalusia led with 23,635 mortgages, followed by Catalonia (23,268), Madrid (18,240), and the Valencian Community (15,692).
The mortgage amount per square metre was highest in Madrid at €3,158, followed by the Balearic Islands (€2,987), the Basque Country (€2,392), and Catalonia (€2,248).
The data paints a picture of a market at a turning point. Foreign demand remains robust, but domestic buyers are feeling the pinch of record prices and tighter financing conditions. As the European Central Bank keeps interest rates elevated, the affordability squeeze is likely to persist, potentially cooling the market further in the coming quarters.
For a broader view of how European economies are grappling with price pressures, see our analysis of rising fresh produce prices. And for those watching the wider investment landscape, the Doha forum's discussion on spreading foreign investment offers relevant context.
