Experts predict a continued rise in property prices across Spain in 2025, driven by a mix of factors such as limited housing supply, anticipated decreases in interest rates, moderate inflation, and population growth fueled by affluent international investors entering the market.

Here, we examine the expected trends in house prices, mortgage rates, and the broader real estate market dynamics that will define Spain’s property sector in the coming year.

Spanish house prices in 2025

The Spanish housing market experienced significant price growth in 2024, with resale property prices rising by 10.7% year-on-year to €2,244/m² in November. This marked the largest annual increase since 2006 and signified seven consecutive months of upward movement.

In 2025, house prices are expected to grow moderately, signalling a stabilisation phase after years of robust recovery. Predictions for national price increases vary slightly among key players:

• Bankinter forecasts a 5% rise, with stronger growth in major cities and popular coastal regions.
• Fotocasa anticipates increases of 5% to 8%.
• Idealista projects growth between 5% and 7%.
• Caixabank, taking a more cautious view, estimates a 4% nominal increase, citing affordability constraints as a limiting factor.

Urban hubs such as Madrid, Barcelona, Alicante, and Valencia are likely to see higher price hikes, supported by strong demand and limited supply, alongside sustained interest from international buyers.

Costa Blanca property prices

The coastal regions, particularly Alicante Province and the Balearic Islands, are expected to benefit from steady price increases due to high demand for holiday homes and tourism. However, rural areas farther from the coast may experience slower growth as urban migration trends persist.

In the Costa Blanca, areas like Orihuela Costa will remain hotspots for international buyers, especially those from Northern Europe. The region's mix of affordable traditional homes and super modern luxury developments appeal to a wide range of buyer profiles.

Mortgage trends in 2025

Mortgage rates will continue to play a crucial role for buyers in 2025. While rising interest rates in recent years have increased borrowing costs, the European Central Bank (ECB) is expected to take a cautious approach to further hikes, prioritising economic growth stability.

Declining interest rates and heightened competition among banks are predicted to improve financing conditions. Fixed-rate mortgages are likely to gain popularity as buyers seek security amidst economic uncertainty. Euribor rates are anticipated to drop further, stabilizing between 2% and 2.5%.

Key factors shaping the market :

• Demand: Spain's enduring appeal as a holiday destination and investment hub ensures continued demand from international buyers, particularly from the UK, Germany, and other northern European countries.
• Accessibility: Regions like Costa Blanca and Orihuela Costa offer excellent flight connections and short travel times, maintaining their status as top destinations for foreign investors.
• Government policies: Initiatives to increase affordable housing and stricter regulations on short-term rentals could influence market dynamics, with potential impacts on both demand and supply.
• Remote work: Hybrid and remote work trends will sustain demand for properties in coastal areas, where buyers can enjoy affordable prices compared to other Southern European destinations.
• Rental market: Rising rental costs and limited supply continue to challenge the domestic rental sector, while holiday rentals are expected to maintain strong demand, particularly in coastal hotspots like Costa Blanca.
• Construction challenges: High costs, limited land availability, and administrative hurdles are slowing new development, shifting demand to resale properties and contributing to price increases.

Orihuela Costa's local property market

Orihuela Costa's property market saw a positive performance in 2024, with a 6% year-on-year increase in property sales, driven by international buyers. British buyers led the market, accounting for 17.5% of sales, followed by German (15.5%), Irish (9.7%), Swedish (6.8%), Belgian (6.8%), and other nationalities.

In total, buyers from 18 different countries invested in the Orihuela Costa area in 2024, a trend expected to continue in 2025 as demand for coastal properties remains strong.

The property market outlook for 2025

The Spanish real estate market in 2025 offers a blend of opportunities. With steady price growth, rising demand for coastal properties, and evolving buyer preferences, the market is set to attract both domestic and international interest.

Prospective buyers and investors are advised to stay informed about these trends and consider seeking professional guidance to navigate the dynamic property landscape.

Looking for your ideal holiday home or property in Spain? Inmo Investments Real Estate in La Zenia host a portfolio of almost 1,000 hand-selected properties in Costa Blanca. Visit their website and start your search for the perfect home.

Photo credit: Inmo Investments Real Estate S.L.

Today, we're speaking with Alexander Pichlmayr, founder and Managing Director of the Inmo Investments estate agency right here in La Zenia. We asked him what it's like to live and work on the Orihuela Costa, and what drew him to the area in the first place.

Alexander, what would you say would be the advantages of living in La Zenia compared to other areas in South Costa Blanca?

La Zenia is special and unique. Centrally located on the Orihuela Costa, with the City of Torrevieja just a few minutes away by car, La Zenia offers a choice of three Blue Flag beaches, carefully tended daily throughout the summer to ensure that they remain in a blissfully idyllic condition. Lapped by the Mediterranean Sea, each beach offers plenty of space to relax and enjoy the average 320 days of sunshine that the Costa Blanca is blessed with throughout the year.

You will find hundreds of cosmopolitan cafes, lively bars, and exquisite restaurants to enjoy in La Zenia. Restaurants cater for every conceivable taste and budget, and with a multicultural mix of visitors and residents alike, you will no doubt be surprised to find that you have more choices here than you have at home.

La Zenia is also home to Alicante Province's largest shopping centre, La Zenia Boulevard. A commercial sanctuary for veteran consumers and casual window-shoppers alike, La Zenia Boulevard boasts a spectacular 161,000 m2 of retail heaven. More than 150 shops representing local and global brands are spread across a single floor, navigated via spacious avenues that meander around the shopping complex.

Does the area appeal to everyone, are there any possible downsides to living in La Zenia?

With so many local amenities, great restaurants, fabulous shopping, and idyllic beaches, La Zenia is popular year-round with local residents from other areas and visitors alike. But that can mean that summers in La Zenia can be busy and car parking spaces can be difficult to locate in high season. I love La Zenia, and I believe that that is a small price to pay in order to enjoy the benefits that the local area has to offer all year round.

What proportion of the local Orihuela Costa population is Spanish?

La Zenia is home to a multicultural mix of residents, but the traditional Spanish population is outnumbered by British, German, Dutch, and residents of many other nationalities. The Spanish population remains an absolutely vital part of La Zenia, bringing with them their vibrancy, natural charm, and legendary Spanish friendliness.

What are your favourite things to do in the area?

Nothing beats grabbing a beach bag and getting down to La Zenia beach – whatever time of day it happens to be. In the mornings, the beaches of La Zenia are deserted but for a few hardy joggers and beach-loving insomniacs, and the Mediterranean Sea provides a reliable visual spectacular suited to end even the busiest of days.

Can you give us some insider tips on the best local bars or restaurants?

It´s certainly no secret that Makai Cafe in La Zenia is the locals' favourite dining spot, but for those looking for truly superb cuisine off the beaten track, try the Old Asia Restaurante or Che Ristorante Italiano. Both offer a mouthwatering experience at excellent value prices.

Are there many local facilities such as doctors and dentists, shops, etc?

I have already mentioned the fabulous shopping experience available at La Zenia Boulevard, but there are plenty of local shops around too that cater to the requirements of the sophisticated consumer. The nearest medical centre is in Cabo Roig, just 1.5 km to the South of La Zenia, and the award-winning hospital in Torrevieja is just ten minutes away by car.

Are there smaller villages nearby that you might also recommend for people thinking of relocating to the area?

Drive to the neighbouring town of Villamartin, just 2 kms inland, and you'll think you have been transported to a faraway place. Green rolling valleys, copses of palm trees, and the slower pace of life contrast so vividly with the beaches and cosmopolitan vibrancy of La Zenia. Villamartin is home to three championship golf courses and the spectacular Villamartin Plaza too, and it's reached within mere moments by car.

Where are the nearest international schools and how good are they?

The El Limonar International School in Villamartin is particularly locally respected. The Phoenix International School in neighbouring San Miguel de Salinas follows the British National Curriculum, offering recognised English qualifications in a wide variety of educational subjects with a natural focus on languages.

Is crime an issue for ex-pats living in La Zenia?

Not at all. Crime is rarely experienced in La Zenia and in common with other areas of the Orihuela Costa it enjoys a very low crime rate, with petty crimes representing the vast majority of Police complaints. La Zenia is a very safe and family-friendly place to live, and the local Police provide effective but unobtrusive support to local residents.

With regard to buying property, what is the real estate market like now in terms of prices going up, or down or staying the same?

Right now, prices are surprisingly stable. Obviously, the Coronavirus pandemic has had a profound effect on the Spanish real estate market, but this has negatively affected market activity rather than house prices, with sellers less keen to enter the market whilst travel restrictions remain in place.

There are buyers around of course, and the pandemic has led to a significant change in what buyers expect from a property. This has been driving domestic demand amongst existing residents who, for instance, wish to trade up to a larger property with more outside space.

Buyers have always looked for the best value for money, but we're experiencing an increased focus on location with sellers being more selective about exactly where they want to live, perhaps being prepared to pay that little bit more for a location that fits their requirements or potential future lifestyle.

Inmo Investments has had offices in La Zenia since 2003, so we've been through tough times before. I believe that this summer, once things start to return to what we perceive as normal, the financial outlook is exceptionally good. Nothing lasts forever, and as a nation, I'm confident that Spain will bounce back from the pandemic quickly.

Is this a good time to buy, and are properties in La Zenia still offering good value?

Of course, I'm biased, but in my opinion, there has never been a better time to consider buying a property in La Zenia. With stable property prices and a real estate market that has proven surprisingly robust and the potential to grow from the current low activity point, potential buyers can still take advantage of prices that offer excellent value. An inactive property market has only one direction … up!

Inmo Investments always have a great selection of properties for sale in La Zenia and the surrounding areas, and for those looking for the ultimate money-saving investment property, our extensive portfolio of apartments always offers outstanding value.

It's still possible to pick up a holiday home on the Orihuela Costa for €55,000, and that compares well not just to other areas of Spain, but to other countries in Southern Europe too. Spain offers ease of access, short flight times, unbeatable weather, and excellent value for money compared to almost any other location in the world.

What communities are there, and can you describe each one and how each might be different?

La Zenia is actually remarkably small, covering little more than a single square kilometre. Squeezed between Playa Flamenca to the North and La Regia and Cabo Roig to the South, La Zenia is split into the beach area which runs the length of the coastline, and the inland areas of Monte Zenia and Torre Zenia. The beach area is predominantly occupied by luxury villas whilst the inland areas closer to La Regia and Castillo de Don Juan tend to be more affordable.

How much are typical properties in La Zenia? Prices for apartments or villas?

A small apartment suited for use as a holiday home or a modest retirement property in La Zenia can be found for as little as €55,000, with larger apartments and penthouses offered to the market for around €90,000.

Villas command premium prices due to their close proximity to La Zenia beach, and you should expect to pay at least €250,000 for a detached villa here. Prices increase substantially the closer you get to the Mediterranean Sea, and budget for at least a half-million Euros if you're searching for a beachfront villa in La Zenia.

Townhouses and quad-villas in La Zenia offer very good value considering the space they offer, and our top tip would be to look around at this particular segment of the market. It is still possible to get a lovely spacious townhouse within just a few minutes walk away from La Zenia beach for as little as €125,000.

Do you have any tips or advice for people looking to buy in La Zenia or the surrounding area?

The best advice we can give to people to maximise their enjoyment of their new property in Spain is that buying close to amenities always pays dividends. Properties within easy walking distance of a beach or a popular commercial centre are always in demand.

When you are looking for property make sure you get local “on the ground” knowledge of the area and the current properties on the market by getting in touch with local estate agents (hopefully including Inmo Investments), subscribing to mailing list offers, and generally interacting with the people who work in the community you are interested in living in.

Of course, Inmo Investments are an estate agent and we're here to sell property, but La Zenia is a small and close-knit community so it's ultimately important to us that we help people and provide them with reliable advice too. We never forget that one day they might be our new neighbours!

To find out more about Inmo Investments or to take a look at their selection of beautiful homes in La Zenia and the surrounding areas please visit their website. Alternatively, you can find their offices beside the N-332 adjacent to the La Zenia beach roundabout.

Looking for holiday ideas and travel inspiration? Find out more about our favourite recommended things to do on the Orihuela Costa or join the La Zenia community Facebook group and find out what's going on in the local area.

Photo credit: Inmo Investments Real Estate S.L.