The Spanish property market continues to evolve in 2025, offering exciting opportunities for buyers and investors alike, particularly in the beautiful inland regions of Andalucía. As a trusted estate agency based in Coín, Spain, Mediterranean Homes specialises in the sale of rural properties across the Guadalhorce Valley.
With years of experience helping clients find their ideal country homes, fincas, and villas, we closely monitor market trends to guide buyers through every stage of their property journey. In this report, we provide an in-depth analysis of Spain’s property market performance during the first quarter of 2025, with a particular focus on Andalucía and the inland Costa del Sol.
We also look ahead to what the remainder of 2025 may hold, including important updates for British and American buyers.
Table of Contents
National Overview: Q1 2025
In Q1 2025, Spain's property market experienced a 7.5% year-on-year increase in average housing prices, with a 2.9% rise from the previous quarter. This growth is attributed to factors such as limited housing supply, strong domestic and international demand, and favourable financing conditions. Notably, nearly half of property purchases were made without a mortgage, indicating significant liquidity among buyers (thinkspain.com).
The supply-demand imbalance persists, with approximately 246,000 new households forming annually but only 85,000–90,000 new homes completed each year (valvest.io).
Andalucía and the Costa del Sol
Andalucía accounts for about 20% of Spain's total property transactions, with Málaga province leading in foreign buyer activity. In 2024, foreign buyers represented 38.4% of the market in Málaga, surpassing the Balearic Islands (thepropertyfinders.com).
The Costa del Sol, encompassing areas like Marbella, Estepona, and Málaga city, remains a hotspot for luxury property buyers and investors seeking rental income. In Q4 2024, the region saw a 16% growth in property transactions, contributing to a 12% annual increase (worldwideproperty.co).
However, only 22% of municipalities in the Costa del Sol have constructed sufficient housing to meet demand over the past decade, leading to significant price hikes (cadenaser.com).
Guadalhorce Valley: Inland Costa del Sol
The Guadalhorce Valley, including towns like Coín, Alhaurín el Grande, Mijas, Monda and Álora, offers more affordable property options compared to coastal areas. Villas in these towns typically range from €250,000 to €500,000, attracting international buyers and holiday rental investors due to their scenic surroundings and lower price points (mediterraneanhomes.eu).
Policy Changes Affecting Non-EU Buyers
In response to the housing affordability crisis, the Spanish government has proposed significant policy changes targeting non-EU property buyers. Prime Minister Pedro Sánchez announced plans to impose a 100% tax on property purchases by non-EU residents who do not reside in Spain (ft.com).
British Expat Market
British nationals have historically been significant contributors to Spain's property market, accounting for an estimated 44% of the 27,000 Spanish homes purchased by non-EU residents in 2023 (ftadviser.com).
The uncertainty surrounding policy changes has led to urgency among British buyers to complete transactions before new regulations take effect. The end of the Golden Visa scheme further limits residency options for British investors (thetimes.co.uk).
American Expat Market
American buyers have increasingly turned to the Spanish property market, often paying the highest prices among foreign investors. In 2024, U.S. citizens led purchases in five regions and paid significantly above average market prices (reuters.com).
Factors such as Spain's appealing lifestyle, favourable tax conditions, and strong property demand have attracted American investors (altavillas.com).
Forecast for the Remainder of 2025
The Spanish property market is expected to continue its upward trajectory throughout 2025, albeit at a moderated pace. Analysts forecast a 3–4% increase in home sales by the end of the year, supported by sustained demand and limited supply (spanishpropertyinsight.com).
In regions like Andalucía and the Costa del Sol, price growth is anticipated to persist, driven by ongoing interest from both domestic and international buyers. However, new taxes and regulations targeting non-EU buyers could introduce volatility and affect foreign investment levels.
Overall, while the market remains robust, prospective buyers and investors should stay informed about policy developments and consider their potential impact on property acquisition and ownership in Spain.
