Investing in real estate in Spain 2025 – is it still worth it and where to start?
Spain has attracted investors from around the world for years, and Poles are among the top foreign buyers. Is investing in real estate in Spain in 2025 still profitable? How to choose the right property and what to watch out for to ensure investing in Spain is safe and profitable? We answer these questions, based on the latest analyses from banks, investment firms, portals such as Idealista, as well as the experiences of market practitioners.
What will you find in the article?
Is investing in real estate in Spain profitable?
The year 2025 brings further stabilization in the Spanish real estate market. After dynamic price increases in 2021–2023, we are currently observing a moderate, but stable rise in property values, especially in tourist regions such as the Costa del Sol, Costa Blanca or the Balearic Islands. According to the Idealista portal, the average price of property purchased by foreign investors in 2025 is about €2,250/m², and in the most prestigious locations even above €5,000/m².
Demand for real estate in Spain remains high, especially among foreign investors. In the first half of 2025, Poles have purchased over 2,000 properties, which places them ninth among foreign buyers. The greatest popularity is for apartments and villas on the Costa del Sol, where short-term rental profitability reaches as high as 6–7% annually.
It is worth noting that investing in real estate in Spain is not only profit from rental income, but also a hedge against inflation and the potential for property value growth over the longer term. Experts predict that prices will continue to rise, though the growth rate may be somewhat lower than in previous years. An additional advantage is favorable lending conditions – Spanish banks offer mortgage loans for foreigners, and interest rates remain at relatively low levels.
How to choose a property for investment in Spain?
Investing in real estate in Spain requires a well-thought-out strategy. The key is to define the investment goal – whether you are after short-term rental, long-term rental, or perhaps capital appreciation over time? Apartments in tourist regions such as the Costa del Sol, Costa Blanca, the Canary Islands or the Balearic Islands enjoy the greatest popularity. That is where demand for holiday rentals is the highest, and the profitability of the investment is the highest.
When choosing a property, it is worth paying attention to several key factors:
* Location – the closer to the beach, the city center or tourist attractions, the greater the rental and appreciation potential.
* Legal status of the property – always check the property register, building permits and any mortgage encumbrances. It is best to engage a Spanish lawyer who will ensure the safety of the transaction.
* Finish quality – modern, well-equipped apartments and homes quickly find tenants and fetch higher prices.
* Possibility of obtaining a tourist rental license – in many regions of Spain there are limits and requirements for short-term rentals.
There are also places where it was decided to freeze granting tourist licenses for a period. In August this year, the Malaga authorities made such a decision:
It is also worth considering purchasing a property from the primary market. Although prices are higher, new developments often offer better standards, modern technologies and greater energy efficiency. By contrast, the secondary market offers a chance to buy property in an attractive location, often with an already developed tenant base.
When investing in Spain, one must not forget about transactional costs – taxes, notarial fees and lawyers’ fees typically amount to 10–15% of the property’s value: taxes and fees related to purchasing real estate in Spain in 2025. Detailed information about taxes can be found here:
What to watch out for when investing in Spain?
Investing in real estate in Spain, though profitable, also comes with certain risks. Here are the most important issues to pay attention to:
- Changes in regulations governing tourist rental
In 2025, new regulations were introduced that tighten the rules for short-term rental. Owners must obtain a tourist license, meet certain technical requirements (e.g., air conditioning, fire extinguishers, first aid kit), and consent of the homeowners’ association is required in many cases. Lack of a license may result in high fines and removal of the listing from portals such as Airbnb or Booking.
- Limited supply of attractive properties
In popular regions such as the Costa del Sol or the Balearic Islands, it is increasingly difficult to find attractive properties at reasonable prices. High demand and limited supply cause price increases and rapid sale of the best offers.
- Currency risk and financial risk
Investing in Spain exposes you to currency fluctuations and changes in interest rates. It is worth considering a loan in euros to minimize exchange rate risk.
- Legal and technical status of the property
Always check the documentation, permits and the property’s technical condition. Work with a reputable real estate office and a lawyer who will guide you through the entire purchase process.
- Maintenance costs and taxes
In addition to the purchase price, you should consider maintenance costs, local taxes, community fees and potential renovation costs.
Summary
Investing in real estate in Spain in 2025 remains an attractive and profitable option, both for those seeking a safe haven for capital and for those counting on rental income. The key to success, however, is thorough market analysis, choosing the right location and type of property, and monitoring regulatory changes. Working with experienced advisers and lawyers will help avoid pitfalls and minimize risk.
