House prices in Spain are forecast to fall in 2024, after increasing by 1.2 percent in 2023. Nevertheless, prices are expected to pick up in 2025, with an increase of one percent. The Portuguese housing market, on the other hand, grew by 5.5 percent in 2023, but was forecast to contract in the next two years.

After a long period of steady increase in real estate prices in Spain, the market was hit by the global financial crisis of 2007, resulting in the burst of the Spanish property bubble. House prices have since picked up and in 2023, the average square meter price reached 2,809 euros - just slightly below 2008 levels. Though prices have risen across the whole country, some regions, such as the Balearic Islands, Catalonia, Madrid, and Andalusia, experienced faster growth than others. Additionally, the gap between newly built and existing home prices has widened. Spain’s real estate market behind others The property market has made great progress, but it is still far off the rest of its European counterparts, and it is positioned, in fact, at the bottom of the European list of the EMF’s house price index, which is led by Czechia and Portugal. Supply is a major factor influencing the price development. Many European countries suffer housing shortages due to sluggish construction activity, and Spain is no exception. In 2022, ranked among the countries with the lowest number of residential construction starts per 1,000 citizens in Europe. Buying vs renting As happens with many other countries, the affordability of buying a home and renting will differ considerably dependent on the area. In 2022, the average Spanish citizen needed between five and 18 years to purchase an average priced property in their region with their full salary, with Murcia and La Rioja being the most affordable regions. The house price to rent index shows that house price growth has been much faster than rental growth. That is good news for homeowners whose homes appreciate over time, but an issue for renters who are yet to purchase a property.

The Report Covers Residential Real Estate Market in Spain and is Segmented by Type (Villas and Landed Houses, Apartments, and Condominiums) and Key Cities (Madrid, Catalonia, Valencia, Barcelona, and Malanga, Among Others). The Report Offers Market Sizes and Forecasts in Value (USD Billion) for all the Above Segments.

House prices in Spain have risen year-on-year since 2014. The house price index measures the development of house prices, with 2015 chosen as a base year when the index value was 100. Between 2021 and 2023, the house price index in Spain rose by eight percent for new housing and 3.2 percent for existing housing. Overall, newly built housing has appreciated more than existing homes.

Forecast: Value Added of Real Estate in Spain 2023 - 2027 Discover more data with ReportLinker!

Approximately 142,014 residential real estate transactions were registered in Spain during the third quarter of 2023. Despite experiencing notable fluctuations, the volume of residential real estate transactions in Spain showed an upward trend during the period under observation.

The commercial property price index for retail buildings in Spain witnessed an overall downward trend between 2014 and 2023. After reaching its peak at 107 index point in the third quarter of 2015, the index experienced a significant decline. Between the third quarter of 2020 and the first quarter of 2021, the property price index plateaued at 81 index points, which not only marked its lowest point during this time period, but also stood at a value lower than the baseline year of 2014. In the third quarter of 2023, the index stood at 87 points.

The average square meter price of new residential real estate in Spain was the highest in Catalonia and the Community of Madrid in 2024. In the second quarter of the year, both regions boasted home prices of over 4,000 euros per square meter. That was substantially higher than the average for the country, which amounted to 2,930 euros per square meter. Overall, house prices in Spain have been on the rise since 2016.

The Europe real estate brokerage market is projected to reach a value of USD 218.60 billion by 2023, exhibiting a CAGR of 3.10% during the forecast period of 2023-2033. The market is driven by increasing disposable income, urbanization, and rising demand for commercial properties. The residential segment holds the largest market share due to the growing demand for affordable housing and increasing population. The sales service segment is expected to witness significant growth owing to the rising trend of property investments. The market is highly fragmented with a large number of local, regional, and global players. Key players in the market include Jones Lang LaSalle (JLL), CBRE Group, Colliers International, Savills, and Knight Frank. These companies offer a wide range of real estate brokerage services, including sales, leasing, and property management. The market is also witnessing the emergence of online real estate brokerage platforms, such as Axel Springer SE, Lloyds Property Group, and Foxtons. These platforms offer convenience and transparency to both buyers and sellers, and are likely to gain market share in the coming years. Recent developments include: March 2024: Newmark Group Inc., a commercial real estate advisor, inaugurated its flagship office in Paris, France. The company, known for its services to institutional investors, global corporations, and property owners, appointed industry veterans Francois Blin and Emmanuel Frénot to spearhead the Paris team. Situated at 32 Boulevard Haussmann 75009, in the 9th arrondissement, the office officially opened on March 11, 2024, and is expected to emphasize capital markets and leasing.January 2024: eXp Realty, a luxury real estate brokerage under eXp World Holdings Inc., unveiled the extension of its esteemed luxury real estate initiative, eXp Luxury, into critical European markets. These markets include Portugal, Spain, France, Italy, Germany, and Greece. This expansion is expected to bolster eXp Realty's international footprint and reaffirm its dedication to setting new global luxury real estate benchmarks.. Key drivers for this market are: Economic Stability and Growth, Technological Advancements. Potential restraints include: Economic Stability and Growth, Technological Advancements. Notable trends are: Legislative Changes Drive a Surge in French Real Estate Interest Among British Buyers.

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What is the Geotechnical Engineering Market Size?

The geotechnical engineering market size is estimated to grow by USD 1.07 billion at a CAGR of 6.8% between 2024 and 2029. The market is experiencing significant growth due to the expansion of various sectors, particularly renewable energy. The integration of artificial intelligence (AI) in geotechnical engineering services is another key trend, enabling more accurate and efficient analysis of geological data. However, the high cost of advanced technologies remains a challenge for smaller players in the market. The renewable energy sector's growth is driving the demand for engineering services, as the installation of wind turbines and solar panels requires a thorough understanding of soil conditions. AI is revolutionizing the industry by providing real-time analysis of geological data, reducing the need for manual labor and increasing efficiency. Despite these opportunities, the high cost of advanced technologies, such as AI and geophysical sensors, is limiting the market growth for smaller companies. Overall, the geotechnical engineering market is poised for growth, with renewable energy and technological advancements presenting significant opportunities.

What will be the size of Market during the forecast period?

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Market Segmentation

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019 - 2023 for the following segments.

Application

  Real estate
  Infrastructure
  Industrial


Type

  Underground city space engineering
  Slope excavation engineering
  Ground foundation engineering


Geography

  APAC

    China
    India
    Japan
    South Korea


  North America

    US


  Europe

    Germany
    UK
    France
    Spain


  Middle East and Africa



  South America

    Brazil

Which is the largest segment driving market growth?

The real estate segment is estimated to witness significant growth during the forecast period. Geotechnical engineering plays a crucial role in the real estate sector due to the increasing demand for safe and stable structures for residential, commercial, and industrial projects. The residential development segment is experiencing significant growth as a result of the pressing need for housing in urban areas.

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The real estate segment was valued at USD 953.70 million in 2019. Governments and private developers are investing heavily to address housing shortages, with initiatives such as the Canadian government's plan to transform six federal properties into 2,800 new homes announced in November 2023. Offshore projects, including oil and gas platforms and wind farms, also contribute to the market's growth. The use of geotechnical engineering in offshore projects ensures the stability of structures in challenging marine environments. Slope failures and landslides are common geotechnical issues that pose risks to infrastructure, particularly in hilly and mountainous regions. Geotechnical engineering solutions, such as those based on rock mechanics and artificial intelligence, help mitigate these risks. Recycled materials are increasingly being used in geotechnical engineering applications due to their environmental benefits and cost-effectiveness. Building information modeling (BIM) is another technology that is gaining popularity in the industry, as it enables the creation of digital models of structures, improving design and construction processes. These trends are expected to drive the growth of the market.

Which region is leading the market?

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APAC is estimated to contribute 36% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional market trends and drivers that shape the market during the forecast period. The Asia Pacific region is experiencing substantial growth in the market due to extensive infrastructure development and urbanization. Urbanization and the increasing adoption of renewable energy projects further fuel the demand for geotechnical engineering technology in the Asia Pacific region. For instance, the development of substations and cabling infrastructure for renewable energy sources necessitates the expertise of geotechnical engineers to ensure the structural integrity of these installations on building sites and the seabed.

How do company ranking index and market positioning come to your aid?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence

The house price index (HPI) for new and existing homes in the Canary Islands, Spain, has increased steadily since 2013, reaching a 10-year record value in 2023. In that year, the HPI reached a value of 164.09 index points for newly built and 142.81 index points for existing homes, meaning that house prices for new construction have risen faster than for existing homes. These figures were around the average for the country. An index value of 150 suggests that house prices have risen by 50 percent since 2015 - the base year of the index.

The Balearic Islands region was the most expensive among Spain's single-provinces to buy a house in October 2023. The cost per square meter was over 4,000 during that period. In contrast, Murcia had the most affordable housing, at less than 1,200 euros per square meter. House prices in Spain have been on an upward trend since 2016, when they plummeted because of the financial crisis.

House prices in the UK rose dramatically during the coronavirus pandemic, with growth slowing down in 2022 and turning negative in 2023. The year-on-year annual house price change peaked at 14 percent in July 2022. In June 2024, house prices increased by 2.7 percent. According to the Nationwide Building Society, the average house price exceeded 265,000 British pounds in 2022. Correction in housing prices: a European phenomenon The trend of a growing residential real estate market was not exclusive to the UK during the pandemic. Likewise, many European countries experienced falling prices in 2023. When comparing residential property RHPI (price index in real terms, e.g. corrected for inflation), countries such as Germany, France, Italy, and Spain also saw prices decline. Sweden, one of the countries with the fastest growing residential markets, saw one of the largest declines in prices. How has demand for UK housing changed since the outbreak of the coronavirus? The easing of the lockdown was followed by a dramatic increase in home sales. In November 2020, the number of mortgage approvals reached an all-time high of over 107,000. One of the reasons for the housing boom were the low mortgage rates, allowing home buyers to take out a loan with an interest rate as low as 2.5 percent. That changed as the Bank of England started to raise the base lending rate, resulting in higher borrowing costs and a decline in homebuyer sentiment.

Malaga was the most expensive city for renting residential real estate in Andalusia, Spain, in October 2023. The average monthly rent stood at 13 euros per square meter in that period. Overall, rents in Andalusia were lower than the national average. Though the rental market in Spain has been on an upward trend, the majority of households live in an owner-occupied home.

Alicante was the most expensive province in the Spanish autonomous community region of Valencia with the average house price per square meter at 2,300 euros in October 2023. In contrast, Castellon was the most affordable at 1,250 euros per square meter. House prices in Spain have been on an upward trend since 2016, when they plummeted because of the financial crisis.