Bank of Spain Sees Few Stability Risks as Home Prices Rise 9.7%

3 articles · Updated · Reuters · Jun 18

Spain's central bank said its 2025 annual report found property-market vulnerabilities remained contained despite strong gains in prices, sales and mortgage lending.
Adjusted for inflation, home prices rose 9.7% in 2025, sales topped 750,000 and new mortgage loans jumped 27.5%, helped by roughly 150 basis points of rate cuts since late 2023.
The bank said the market still looks less stretched than during the pre-2008 bubble: prices in the first quarter were 12.2% below the 2007 peak, and only 52% of purchases used mortgages.
It warned that affordability and limited construction are worsening a housing shortage estimated at 750,000 homes, delaying homeownership and young adults' move out of their parents' homes.
The report called for coordinated action by national, regional and municipal authorities to expand supply as Spain tries to balance tourism-driven demand with rising concern over rents and housing costs.