The latest report by Fotocasa Research, “Radiografía del mercado de la vivienda en el segundo semestre de 2025” (Overview of the Housing Market, Second Half of 2025), confirms that Spain is closing the year with the highest level of real estate activity in the past three years.

Data collected by the property platform reveal that:

• One in three Spaniards (33%) has carried out some form of housing transaction in the last twelve months, whether buying, selling or renting.
• Purchases and sales are driving growth, while the rental market remains stable.
• Total housing demand (buying + renting) now reaches 29% of the population — the highest figure since 2017.
• 18% of Spaniards have bought or attempted to buy a property in the past year, three percentage points higher than in 2024.

In terms of prices, the report shows a notable rise:

• The average price of housing increased by 18% year-on-year in October, the highest growth rate ever recorded.
• The average value stands at €2,789 per square metre, just 5.5% below the 2007 peak.
• If this pace continues, 2025 could close with over 700,000 property sales, marking the best performance since before the financial crisis.

The overall conclusion is clear: strong demand, limited supply and an increasingly favourable financial context are together driving a new phase of expansion in Spain’s housing market.

What This Scenario Means for the Luxury Property Market

Although the study analyses the residential market as a whole, its implications for luxury real estate and high-net-worth investment are particularly significant.

1. Robust demand underpins the high-end segment

With demand at historic highs, the premium market benefits from a steady flow of solvent buyers, both domestic and international. Madrid, Barcelona, the Costa del Sol, the Balearic Islands and Valencia continue to lead in prime-location transactions, where the supply of quality properties remains extremely limited.

2. Structural shortage of supply in exclusive areas

The imbalance between rising demand and restricted supply is even more evident in established, high-value enclaves such as Salamanca, Chamberí, Jerónimos, Chamartín and La Moraleja. The potential for new development is virtually non-existent, turning exceptional properties into true safe-haven assets.

3. Luxury buyers favour ownership as a store of value

With rental prices remaining high and the supply of quality homes scarce, many high-net-worth individuals are choosing to buy rather than rent. Purchasing luxury property is increasingly viewed as a strategic and wealth-preserving decision, rather than a short-term opportunity.

The Avenue Select Real Estate’s Perspective: Spain as a Global Hub of Luxury Living

The Avenue Select Real Estate, a firm specialising in high-end sales and advisory services with a presence in Spain, Mexico, the Dominican Republic, Miami and Dubai, interprets these figures as confirmation of Spain’s strong position on the global luxury property map.

Its Managing Director, Juan Luis Sáez Espinosa, summarises it as follows:

“This report highlights a mature and structurally sound market, where high-quality housing — and particularly luxury property — has become a strategic asset, capable of preserving value and offering long-term stability.”

From the firm’s experience in high-end transactions, three insights define the current moment in the sector.

1. Madrid and its surroundings remain magnets for capital

Across Madrid’s prime districts — Barrio de Salamanca, Jerónimos, Chamberí, Chamartín, La Moraleja and Boadilla del Monte — a clear pattern emerges:

• Strong demand for properties offering privileged locations, natural light, high ceilings and energy efficiency.
• Minimal turnover of truly distinctive residences.
• Buyers willing to pay a premium for refurbished, move-in-ready homes.

“In genuinely exclusive areas,” explains Sáez Espinosa, “the question is no longer whether the market is expensive or affordable. What really matters is the ability to access singular properties — those combining location, architecture and scarcity. In the prime segment, value is defined not by price, but by the uniqueness and excellence of the asset.”

2. Spain’s role within the global luxury cycle

The momentum of the Spanish market is mirrored across the other territories where the firm operates — Mexico, the Dominican Republic, Miami and Dubai — all of which are experiencing intense activity in prestigious locations.

“Our clients no longer think in terms of borders,” notes Sáez Espinosa. “Their vision is global. They assess opportunities in Madrid, Mexico City or Punta Cana using the same criteria: preserving wealth, enhancing quality of life and diversifying within secure, stable environments.”

3. Strategy and expert advice: essential to invest wisely

Rising prices and limited supply reinforce the importance of expert guidance.

“In the luxury segment, the mistake is rarely paying a little more for an exceptional property,” says the director. “The real risk lies in buying without strategy, without verified information and without a deep understanding of the market.”

Strategic Insights for High-Net-Worth Buyers and Investors

1. Act before prices reach new historic highs.
   With values approaching their 2007 peak, top-quality prime properties still offer scope for revaluation and medium-term stability.
2. Prioritise locations and assets with enduring demand.
   Iconic neighbourhoods, homes with distinctive views, architectural landmarks, developments with high-end amenities and signature new-build projects tend to maintain their appeal even amid market volatility.
3. Combine residence with an international investment strategy.
   Diversifying across Spain, Mexico, the Dominican Republic, Miami and Dubai allows investors to balance currency exposure, economic cycles and lifestyle returns.
4. Rely on a luxury real-estate firm with a global outlook.
   In a competitive market, working with a team that has deep knowledge of each prime area, access to exclusive opportunities and genuine international perspective is decisive. It marks the difference between simply spotting an opportunity and transforming it into a long-term, successful acquisition.

“Our mission,” concludes Juan Luis Sáez Espinosa, “is to anticipate market trends, recognise value before it becomes obvious, and guide our clients towards secure, strategic and enduring investment decisions.”