CaixaBank's research unit has significantly upgraded its forecasts for the Spanish residential market, confirming a more robust expansion phase than anticipated.
Key Projections:
1. Housing Prices:
2025: +9.0% (upward revision of +3.1 p.p. vs. February forecast)
2026: +5.7% (upward revision of +2.7 p.p.)
2. Transaction Volumes (Sales):
2025: 670,000 transactions (+20,000 vs. prior forecast)
2026: 683,000 transactions (nearly +100,000 vs. October 2024 forecast)
Demand Drivers:
The notable acceleration in Q1 2025 (continuing 2024's upward trend) is attributed to:
- ECB interest rate cuts: Cheaper mortgage financing and revived credit flow.
- Improved household purchasing power: Increased disposable income and moderating inflation.
- Strong foreign demand: Attraction for non-residents (tourism/work) and residents (positive migration flows).
- Price growth expectations: Incentivizing buyers to act sooner.
Supply Situation and Key Risk:
Despite improving supply indicators (new construction permits rose 19.4% YoY in Q1 2025, reaching 133,000 units over 12 months), a significant imbalance persists:
- Supply remains insufficient to absorb robust demand.
- An accumulated deficit of ~500,000 housing units since 2021 exists.
Conclusions and Outlook:
CaixaBank Research concludes that:
The market is in a "full expansionary phase", with the upward trend expected to continue through 2025-2026.
The persistent supply-demand imbalance is a key price driver and will exert continued upward pressure in coming quarters.
This imbalance will create additional pressure on affordability ratios, reinforcing the urgent need to accelerate affordable housing construction, particularly in high-demand areas.