Why international investors are turning to Spanish real estate in 2025

Spain continues to shine on the global property investment stage, thanks to a winning mix of cultural diversity, quality of life, and economic opportunity. Cities like Barcelona, Madrid, and Valencia not only offer a vibrant urban lifestyle but also represent smart, long-term investment opportunities in a climate of increasing international interest.

Whether you're a first-time buyer or an experienced investor looking to diversify, Spain’s real estate market provides a unique mix of security, yield, and value.

Why Spain? The key drivers

Spain has consistently drawn foreign buyers for years—but what’s behind the recent surge in investor interest?

Affordability: Property prices in Spain remain significantly lower than in many Western European counterparts. According to Eurostat, the average price per square metre in Spain is €1,734, compared to €4,095 in France and €5,723 in the UK (Q4 2024 figures).
Lifestyle Appeal: With over 300 days of sunshine a year in many regions, world-class cuisine, beaches, and cultural heritage, Spain offers exceptional lifestyle value.
Cost of Living: Spain boasts a lower cost of living than most of Western Europe—up to 30% lower in some cities compared to London, Paris or Amsterdam (Numbeo, 2025).

The top three advantages of investing in Spanish property

1. Strong, consistent returns

Spanish property can offer both capital appreciation and monthly rental income. Property prices in key urban hubs have risen steadily:

Madrid saw a 6.3% increase in home values in 2024
Barcelona followed closely with a 5.7% increase (Idealista)

Long-term rental yields in major cities currently average between 4% and 6%, depending on location and property type.

2. Diversification and financing opportunities

Adding Spanish property to a broader investment portfolio is a strategic way to diversify. Unlike stocks or crypto, real estate offers a tangible asset backed by land and demand. And in Spain, lending remains accessible:

Non-resident buyers can typically secure up to 70% loan-to-value (LTV) with fixed-rate mortgages from major Spanish lenders.
Interest rates have stabilised around 3.25%–3.75% for fixed terms (Bank of Spain, Q1 2025).

As a note: a bank will lend you money to buy a house, but not to buy shares in itself—indicating how institutions view the relative safety of property investments.

3. A hedge against inflation and currency risk

Property offers a natural hedge against inflation, particularly when held over a long term. Spain’s relative stability within the Eurozone adds another layer of security for international investors looking to shield their assets from currency volatility.

What types of properties are most appealing?

Investor preferences typically fall into two categories:

Turnkey or New Developments: Ideal for hands-off investors. These properties are move-in ready and require minimal management.
Renovation projects: Perfect for those wanting to add value and potentially resell or lease at a premium. These can yield significant upside but require more involvement—or at least a reliable local project manager.

Challenges to be aware of

While Spain is attractive, investors should remain aware of potential hurdles:

Regulatory Shifts: For instance, in Catalonia, there's discussion around increasing the Property Transfer Tax (ITP) for resale homes, currently set at 10%. Changes are not yet confirmed but are worth watching.
Renovation Risks: Managing a renovation remotely can be tricky. Engaging a trusted local project manager is crucial to ensure timelines and budgets are met.

Is now the right time?

Even with the recent termination of the Golden Visa, Spain remains a resilient and rewarding investment destination. Clear strategy and professional guidance are essential to making the most of current opportunities.

With stable prices, high rental demand, and a growing international buyer base, 2025 continues to be a compelling time to invest in Spanish real estate.