A new real estate boom in Spain
The Fotocasa portal organised the Pro Academy Day in Madrid – a meeting of real estate professionals and experts. One of the key ideas was voiced by economist Gonzalo Bernardos, who believes that the real estate market in Spain is on the verge of a boom driven by structural changes in the way homes are purchased. The decisive factor is the transfer of wealth from generation to generation, which is changing the buyer profile and sustaining strong demand despite rising prices.
At the same time, we are talking about a boom rather than a so-called “bubble” like the one seen in 2006–2007. Today, prices are rising not because banks are issuing too many loans, but due to a clear shortage of new housing supply.
Young buyers and family support
People under 40 have become the group that most actively drives home sales and purchases in Spain. Their rate of homeownership has fallen sharply (from 59% in 2007 to 27% in 2024 among those aged 26–29), and their access to housing is only possible thanks to financial support from their families.
Family support has become a new social norm of parental responsibility, covering the equity that banks do not finance. Thanks to this, a generation with limited incomes, unstable employment and a tense situation on the rental market can still gain access to homeownership.
Buying vs renting: the impact of record prices
Tensions in the rental market are the main factor pushing people to buy. Record high prices, scarce supply and a sense of legal uncertainty are causing growing concern among young tenants, many of whom realise that they are paying more than they would on a mortgage. Evidence that buying can be cheaper than renting, combined with family support, accelerates the decision to buy.
How the current cycle differs from 2006–2007
The current cycle differs from 2006–2007 in the following key aspects:
- Cautious bank lending policyThe volume of mortgage loans issued today is much lower than in those years, and the share of fixed-rate loans is higher. In nominal terms, only about 35% of the 2006 volume of mortgage lending is being issued. Most loans carry a much lower default risk than in 2006–2007, when many variable-rate mortgages were granted.
- Shortage of supplyThe main constraint is the lack of new housing. Market activity is concentrated in the resale segment, which continues to experience a boom fuelled by scarcity. Supply does not grow overnight; it takes years, if not decades, for land to be converted into housing.
Recommendations for real estate professionals
For real estate professionals, three main lines of action have been highlighted to help them adapt to the new situation:
- A focus on young people, who are the main group of buyers – especially those who want to stop renting with the support of their families.
- A priority on attracting clients, which may be more difficult than before; the real challenge is to find resale properties and set adequate prices.
- An understanding that purchase decisions are made within a “buyer–agent–family” triangle, where parents usually provide the main equity contribution.
These structural changes paint a picture in which demand will remain stable as long as the supply shortage persists and family financial support continues. Real estate professionals should take into account this new dynamic, characterised by rising prices, young buyers with limited resources and families reallocating their savings, which will be key to anticipating trends and supporting each buyer profile more effectively.
