Spain’s property market is back at pre-crisis highs as prices continue to surge despite mounting concerns over affordability.

The average cost of housing reached €2,085 per square metre at the end of 2025, marking a 7.4% annual increase and the highest level since 2007, according to new data from Sociedad de Tasacion.

Experts expect prices to rise by a further 7.2% year-on-year by mid-2026, albeit with a slight moderation in pace.

Demand remains strong, while supply continues to lag behind, particularly in high-pressure areas.

Consuelo Villanueva of Sociedad de Tasacion warned the market is beginning to show signs of strain.

‘The market remains active, but certain limitations are starting to emerge,’ she told Idealista.

In areas where demand is strongest, prices continue to climb, making it increasingly difficult for buyers to get on the ladder.

The biggest increases by region are being seen in Madrid, where average prices are €3,422/m2 (+8.8%), followed by the Balearic Islands at €2,994/m2, and Catalonia on €2,872/m2.

At the other end of the scale, Extremadura remains the cheapest region, with average prices of €1,024/m2.

But crucially, every region in Spain now exceeds €1,000 per square metre, highlighting the nationwide rise in costs.

For buyers, it now takes 7.8 years of full salary to purchase an average home in Spain, up 3.6% compared to last year.

Meanwhile, the housing affordability index has fallen further below the ‘balanced’ threshold, signalling worsening conditions for households.

The report also shows a slight drop in confidence across the property sector, with the index slipping to 58.7 points in early 2026.

However, on a yearly basis, sentiment remains positive, suggesting the market is still holding firm despite growing pressure.