Spain has recently given rise to positive expectations, fears, and heated discussions – what are the statements of the country’s prime minister about a possible ban on the sale of real estate to foreigners and laws on restrictions on short-term rentals in some municipalities; What is hidden behind the big phrases and initiatives, and how all this hype affects the market. We discussed it with our experts from major Russian-speaking real estate agencies.
The Spanish housing market ended 2024 on the rise: sales grew, prices too – plus 11.2%, according to the Institute of Statistics.
Rental rates have reached a record – plus 11.5% for the year.
However, the rise in the cost of buying and renting apartments is causing discontent among citizens. The main reason for the price increase is a lack of supply, but many locals, as usual in such situations, tend to nod towards foreigners who love Spain and cheerfully buy square meters in Barcelona, Madrid and other cities.
Indeed, transactions with non-residents reached their maximum values last year, the share of buyers from abroad in total sales was almost 15%, and in some regions it was much higher (for example, in the Balearic Islands – 30%).
The authorities are trying to respond to the situation. So, a year ago it became known about the upcoming cancellation of the popular program for obtaining a residence permit for large investments in real estate: the Golden Visa program ends on April 3, 2025.
At the very beginning of this year, the country’s Prime Minister, Pedro Sanchez, spoke out quite radically, in the spirit of today’s times, promising first to introduce a 100% tax on transactions with foreigners to his voters, and then, having got into the taste, he threatened to ban the sale of housing to newcomers.
Spaniards are annoyed not only by real estate investors, but also by tourists. Indeed, the foreign tourist flow last summer reached a record and brought, by the way, impressive revenues to the treasury (86.7 billion euros for 8 months of 2024). There are so many guests in the most attractive cities of Spain that it has become a serious nuisance to the locals. Barcelona announced that it plans to completely ban short-term rental housing by 2028 and has introduced rules since the beginning of this year obliging property owners to register all tenants in the national database.
So, what is happening in the Spanish housing market?
What was the first quarter of 2025 like in the Spanish market? Have any trends changed since last year? Is the activity of foreigners high? Is the activity of Russian-speaking buyers high?
Pavel Maslov, CEO of Estate Barcelona agency: The first quarter is not over yet, but it is clear that the real estate market in Spain continues to grow. Housing prices are increasing, and in 2024 they rose by more than 10%. Lower interest rates and a huge housing shortage are stimulating demand and rising prices.
Last year, Spain set a record for property sales to citizens of other countries – 69,418 transactions, the highest figure since 2007. Russians and Ukrainians account for about 5% of total sales to foreigners.
Ekaterina Okhilkova, Head of the Expert Agent agency: In January, 60,650 home purchase and sale transactions were registered in Spain, which is 11% more than in the same period last year and is the best January figure since 2008. Prices for apartments and houses also continued to rise. The most noticeable growth is in Malaga, where the cost of new housing has increased by 24.4% over the past year. Demand from foreign buyers remains high, especially for facilities in tourist and coastal areas. The activity of Russian–speaking buyers is also noticeable – 690 transactions were completed in the 1st quarter of 2025.
For what purposes do foreigners purchase real estate in Spain? Which customer groups can be identified? What are the usual budgets?
Ekaterina Okhilkova: There are several purchase goals. For example, to generate income from rent or resale. Clients of this kind usually consider Barcelona, Madrid, Valencia, Malaga, Costa del Sol, and the Canary Islands. Budgets for the purchase of apartments in tourist areas range from 150,000 to 500,000 euros, for the purchase of premium properties in the city center and on the coast – from 500,000 euros and above. They choose Barcelona, Valencia, Madrid, Alicante, and the Balearic Islands for their own accommodation. The cost of small apartments ranges from 150,000 to 300,000 euros, comfortable housing with 2-3 bedrooms will cost from 300,000 to 700,000 euros, villas and townhouses are offered from 500,000 to 2 million euros.
There are wealthy retirees and relocators who purchase real estate, who appreciate the opportunity to live a quiet life in a warm climate, and there are those who need homes for recreation and seasonal stays. The goals of Russian-speaking buyers are to invest capital, obtain a residence permit, and find a comfortable place to live. Their budgets range from 150,000 to 5 million euros.
In general, budgets strongly depend on the location: for example, an apartment for 300,000 euros in Madrid will be compact, and for the same money in Torrevieja you can buy a villa with a swimming pool.
Pavel Maslov Questioner: There are two categories of Russian-speaking clients. The first is those who choose Spain as a place of permanent residence, more often with the whole family. The reasons for their choice are obvious: safety, climate, medicine, infrastructure, transport accessibility (flights to almost the whole world). They tend to purchase houses in the suburbs of Barcelona or large apartments in premium areas. The second category of buyers are people who are not going to move, but want to save and increase their savings by investing them in safe profitable instruments in a stable currency. Such clients choose commercial real estate with a tenant in major cities such as Barcelona and Madrid.
How will the completion of the Golden Visa program affect the Spanish market? How large was the share of such transactions? Is there a rush now, before the completion of the investment residence permit program?
Olga Popova, Head of LUXBARCELONA Agency: Yes, there is a lot of excitement. There are those who seek to “jump into the last carriage”, someone wants to change their existing type of residence to the residence of the investor “golden visa” or purchase additional facilities so that the purchase amount is more than 500,000 euros. We select something for them as soon as possible, make a deal, apply for this type of residence. Sometimes the decision – approval for the application – came very quickly, within a week after submission.
In fact, the share of purchases under the program is not that large – only 5-6% of all transactions with foreigners. The scheme has been in operation since 2014, and it did not particularly affect the value of real estate.
Pavel Maslov: The number of such sales is less than one percent of the total number of transactions in the Spanish real estate market. Since we work in the premium segment, the vast majority of our deals are with a budget of 500,000+ (this is the threshold for participation in the Golden Visa). Citizens of non-EU countries really did not miss the opportunity to receive an additional investor’s residence permit bonus, which did not oblige them to become tax residents and did not oblige them to live most of the time in Spain. This was not a decisive factor, but it was a great advantage along with others. Yes, we have seen increased activity over the past six months, but there are only a few weeks left before the program closes, and everything will come to naught in the coming days.
Ekaterina Okhilkova: The cancellation of the Golden Visa program from April 2025 will have a significant impact on the market. The demand for luxury properties is likely to decrease, which may lead to stabilization or even a decrease in real estate prices in popular regions. From the launch of the program in 2013 to its completion in 2025, Spain has issued more than 33,000 golden visas, most of them related to real estate investments. Although these transactions accounted for only a small part of the total volume, their impact was noticeable in certain segments, especially in large cities and tourist regions. In general, the cancellation of the Golden Visa program is aimed at stabilizing sales and ensuring housing affordability, which in the long term may lead to a more balanced market development.
At the beginning of the year, Pedro Sanchez’s statement about the introduction of a protective tax on transactions with foreigners made a lot of noise. That is, in fact, the authorities want to deprive foreigners of the opportunity to buy Spanish real estate. How likely is the prospect of introducing such a drastic measure? What are the expectations of market players in this regard today?
Pavel Maslov: This is a dubious populist initiative. It is presented by the Socialists to their electorate as a measure to curb the rise in real estate prices, and is allegedly aimed at making housing affordable for the middle class and young citizens. However, the introduction of the tax does not solve the main problem – the lack of supply!
The main reasons for the price increase are low construction rates and ineffective government regulation. Instead of prohibitive taxes, it is necessary to develop construction projects, reduce bureaucracy and stimulate the rental market.
The introduction of a barrier tax may violate EU laws on the freedom of movement of capital, and in case of discrimination against foreign buyers, legal proceedings are possible, including in the European Court.
We believe that the probability of introducing this measure is very low. If Sanchez’s proposal continues, the adoption of such a law will be delayed. In any case, we have already developed legal solutions to this problem for our clients. By the way, many choose investments in commercial real estate, which will not be affected by the proposed tax changes.
Olga Popova: Many bloggers picked up on Sanchez’s remarks and started making a fuss. But the law has yet to be passed by Parliament, and it can be rejected at any time… According to the draft law, the amount of taxes may change for companies that were engaged in flipping, that is, they bought real estate, renovated it, and then resold it. Previously, they could have made a deal with a reduced tax of 5%, but now they will have to pay the full 10%. There are a lot of things being discussed right now… It is also possible that the tax for buyers of real estate worth from 600,000 to 900,000 euros will be increased from 10% to 12%. So far, there is no reason to panic. And we are so used to changes in the market, laws, and various restrictions that nothing will surprise us anymore, and we will adjust to the changes in this case.
Ekaterina Okhilkova: Although Sanchez’s proposal has caused a wide public outcry, its implementation faces a number of obstacles. Firstly, there is political resistance – opposition parties and representatives of regional authorities criticize the initiative, calling it xenophobic and promising to block its implementation in the regions they control. Secondly, there are legal aspects: the introduction of such a tax may contradict the principles of the European Union and lead to legal disputes at the EU level. Thirdly, there are economic consequences. Experts warn that such a measure will scare away foreign investors, which will negatively affect the construction sector and the economy as a whole.
Some regThe Spanish authorities are introducing measures against short-term rental housing. How much will it affect or already affect these markets? Are there many of your clients who have purchased housing for the purpose of renting? What do you recommend them to do with their assets now?
Olga Popova: So far in Catalonia, the measures are rather bureaucratic. From July 2025, all short-term contracts will have to be registered in the register of tenants. This also applies to those who rent and move in through Booking, Airbnb. Even if the rent is only for 3-4 days, we will have to provide information about the tenant. So far, this has not affected investors in any way. We’re used to adapting to every law, so it doesn’t scare us. In any case, the market is very active, and it is always possible to reinvest funds. In Barcelona, they want to reduce the number of apartments with a tourist license to a minimum in a few years. We don’t know yet what principle this will follow. But the demand from investors for the purchase of apartments with an existing tourist license has fallen.
Pavel Maslov: Yes, Barcelona, where we operate our main business, is one of the regions where measures have been taken against short-term rentals. This has already affected the rental market, which already had a large deficit. Investors are withdrawing their offerings from the market and moving into other types of assets, including commercial real estate. Customers are attracted by the fact that there is no price regulation and fairly low investment entry costs, as the tax is lower (only 2.5% versus 10% for residential properties).
Ekaterina Okhilkova: Yes, I think that in those regions where restrictions are imposed on short-term rentals, the market will react. The changes will affect the cost of housing. Our clients did not encounter these issues, because our main buyer was targeting an investor’s residence permit, and the objects were purchased for personal use. For those who are faced with such a problem, I recommend that you reconsider the issue of further holding this asset. Perhaps it makes sense to go out and enter into more interesting investment projects.
Has Congress recently re-passed a bill that, among other things, will make it easier to evict paychecks? What are the future prospects of this bill? When, in your opinion, can the payback problem be finally resolved in Spain?
Olga Popova: The problem will be solved definitively, in my opinion, when non-socialists come to power. Spaniards themselves are tired of these problems, but there are still no mass organized demonstrations against the unauthorized seizure of housing. My lawyer finds it difficult to make a forecast about the practice of applying the new law. There are a lot of apartments for sale on the market now, occupied by pay-offs. They are sold at a price below the market, for 50,000-100,000 euros you can buy an apartment when its market value (without uninvited guests) is 100,000-130,000 euros. However, no one is in a hurry to buy objects with squatters now, which means that it is not yet clear exactly how this law will work in practice, and whether the payouts will find new loopholes in it. In any case, there are always ways to protect themselves from squatters, and all our buyers enjoy staying in Spain in their own homes, even coming for 2-3 months a year.
Pavel Maslov: We think that the problem with salaries will not be solved under the current ruling party. I would like to note that the problem does not concern our clients, since in the segment in which we operate, real estate is located in gated residences with security or in houses where there is always a concierge and an alarm system is connected.
Ekaterina Okhilkova After congressional approval, the bill was referred to the Senate for final approval. It is expected that the Senate will support the initiative, given the broad support in the lower house of parliament. After approval by the Senate and publication in the Official State Bulletin (BOE), the law will enter into force. Theoretically, the law will allow for the eviction of landlords under an accelerated procedure and protect the rights of owners, but it is important that judicial and law enforcement agencies effectively use the new mechanisms. It is also necessary to take into account the reasons why people become self-employed and develop social programs to support vulnerable segments of the population. Property owners should be aware of their rights and opportunities to protect themselves from illegal seizure of property by squatters.
What kind of real estate and where do you recommend investors to purchase today?
Olga Popova: I recommend major cities to investors, first of all Barcelona and Madrid. In Barcelona, over the past 10 years, before my eyes and according to statistics, house prices have increased by 30%. Madrid is also good for investment, the city is actively developing.
Commercial real estate or apartments in significant locations with views of the sights, of which there are many in Barcelona, are always the best investment and will always be liquid.
Which regions/cities in Spain do you recommend considering for your own residence?
Olga Popova: According to my observations, buyers have recently begun to actively explore the north of Spain, cities and regions such as Oviedo, Santander, San Sebastian, the Basque Country, Asturias. These are ecologically clean regions, without crowds of tourists, in which small pleasant cities are especially attractive. Suitable for families without small children and for a happy retirement.
Well, in our experience, most people want to live by the sea. Real estate no further than a kilometer from the coast is always liquid. In our region of Catalonia, I recommend the Costa Brava and Costa Dorada. The Costa Brava is more expensive than the Costa Dorada, and each coast has its own pros and cons. For some, a minus can turn into a plus, since everyone’s preferences are different.
Spain is a diverse country from region to region, and everyone will find their own cozy home.
Thank you for the conversation with our experts in Spain:
Pavel Maslova, CEO of Estate Barcelona Agency
Olga Popova, Head of LUXBARCELONA Agency
Ekaterina Okhilkova, Head of the Expert Agent agency
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