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The current state of Spain’s real estate market is characterised, broadly speaking, by the strength of demand and the scarcity of supply. As a result of this mismatch between supply and demand, home prices have accelerated, especially in the case of new-builds. Here at CaixaBank Research we already predicted that the upward trend in the real estate market would take hold in 2024, but the published data have proved to be more bullish than expected, and this, together with the improvement in the economic outlook, has led us to revise upwards our real estate sector forecasts for 2024-2025.

The beginning of 2025, with a month of January marked by contrasts, exemplifies how political and geo-economic risks can continue to steer the market.

In the coming years, the paths of interest rates and nominal GDP growth will create an environment in which it will not be so easy to regain fiscal space without a proactive effort by governments.

2025 is set to be a year of change between a world that has not quite died yet (globalisation, multilateralism, liberal democracies) and another that has not quite been born and which nobody knows what shape it will take.

The indicators that have been published during the opening months of the year paint a picture of a buoyant Spanish economy in Q1 2025, albeit with a slightly less vigorous growth rate than in the previous quarter.

In his first six weeks in the White House, President Trump has succeeded in disrupting the world order repeatedly. On the trade policy front, uncertainty will cloud the economic outlook in the short and medium term, and the risk of protectionist escalation is high.

At CaixaBank Research, we are not leaders in research into big data or artificial intelligence. However, we do try to keep an eye on the latest developments in this field in order to improve economic analysis, especially in those areas that are key in order for growth to be more dynamic, more inclusive and more sustainable in the long term.

The Spanish economy is growing at a good pace – more so than expected – and this leads us here at CaixaBank Research to revise our growth forecasts for 2025 upwards from 2.3% to 2.5%. Despite the good news, the focus is not on the improvement in the forecasts, but rather on the uncertainty that surrounds them. 

The start of 2025 has brought a change in the focus of the financial markets, which was consolidated in February. Investors have shifted their attention away from the central banks, which were the main driver of the markets in 2024, towards an environment of high geopolitical risk, with the «Trump effect» as a key catalyst.

The latest available economic indicators suggest that the trends observed for much of 2024 remain in place as the year draws to a close: buoyancy and resilience in the US, weakness in the euro area due to the delicate situation in Germany and France, and a lack of momentum in the Chinese economy in the absence of decisive economic stimuli.

Portugal’s National statistics Institute confirmed that the economy grew by 0.2% quarter-on-quarter in Q3 (1.9% year-on-year), with a significant contribution from domestic demand, highlighting the strength of private consumption.

After growing by 3.2% in 2024, in 2025 the economy is expected to continue to grow above the euro area average, supported by strong household consumption and the recovery of investment. The major geopolitical challenges and Europe’s weak growth represent the main risk factors.

The Spanish economy is maintaining a good tone as 2024 draws to a close. The labour market is performing well despite the slight slowdown in November; inflation is picking up, driven by the most volatile components; the current account surplus continues to grow, and home sales are soaring.

The surge in uncertainty and the tariff hikes introduce downside risks to global growth, as well as upside risks to US inflation, while the impact on prices for the rest of the world is much more uncertain. 

The international economy showed remarkable resilience in 2024 and the available data suggest that world GDP may have grown slightly above 3%. The tailwinds that supported economic activity will likely continue to blow in 2025, albeit with less strength and in the face of significant challenges.

That being the case, for the moment, and while we wait for events to unfold, it seems that our economy ought to weather this period of uncertainty better than our main trading partners.

Sentiment improves in the US, but remains somewhat hesitant in the rest of the world, while the central banks make progress in the «gradual» monetary easing process.

GDP growth once again beat expectations in Q3 and the labour market and the PMIs kick off Q4 on a good footing.

Spain’s GDP continued to record dynamic growth in Q3 2024 and the main indicators suggest this trend will continue in Q4. The strength of the labour market is boosting household incomes and inflation remains contained, despite the ongoing rebound.