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Spain’s agrifood sector is enjoying an expansion in 2025, favoured by improved weather conditions, the containment of production costs and increased demand. All this translates into a gradual increase in production and exports, which have already recovered to pre-pandemic levels, as well as a more dynamic labour market, with job creation and a reduction in temporary employment. The outlook for the coming quarters is encouraging, although significant challenges remain, including the US tariff hikes and the growing impact of extreme weather events such as floods, droughts and fires.

The initiation of the ECB’s monetary policy normalisation process has led to an acceleration in house prices, especially in markets with a significant mismatch between insufficient supply and dynamic demand. The economies in which real prices have increased the most in the last year and a half, and where the residential markets are showing signs of more significant overvaluation, include Portugal, Bulgaria, Hungary, the Netherlands and Estonia. In contrast, the markets of large economies such as Germany, Sweden, France and Luxembourg remain overvalued, but have corrected the strong price growth they experienced in the decades leading up to the pandemic, reducing signs of overheating.

House prices and the number of sales have surged since mid-last year in Spain, although there are significant geographical differences. In 2024, house prices grew more vigorously in the most expensive areas, thus widening the price gap between municipalities and regions, and this is causing some of the demand to begin to shift towards more affordable areas. At the provincial level, temperature could be a relevant factor: sales are growing more rapidly in the cooler regions of the Northwest of the peninsula, while the traditional tourist areas are experiencing a more gradual increase in demand. In addition, the sharp rise in house prices in the major cities is causing a shift in housing demand towards more affordable peripheral areas, where house prices are expected to experience rapid growth in 2025.

The Spanish real estate market accelerated in 2024, especially in the second half of the year, largely thanks to the fall in interest rates. This was added to a series of factors that are keeping housing demand very dynamic, including significant migration flows, rapid job creation and strong foreign demand. On the other hand, the supply of new housing is beginning to awaken, but it remains insufficient to address the high demand. This mismatch between strong demand and scarce supply is driving up house prices – a trend that we expect to continue in 2025.

La inflación sigue preocupando a los bancos centrales: pese a haber encadenado caídas en los últimos meses, todavía no se puede saber con certeza a qué velocidad continuará disminuyendo. Si a esto le sumamos la inusual resistencia de la economía, encontramos una razón para que la Fed y el BCE suban algo más los tipos de interés y los mantengan elevados durante más tiempo. Ricard Murillo Gili y Patricia Esteban nos lo cuentan en el último episodio de “Economía Exprés”, el pódcast de CaixaBank Research.

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Valuations of commercial real estate assets recovered significantly during 2024, driven by the shift in monetary policy and the reduction of market interest rates. Investment in the sector grew at an annual rate of around 20% and the living, hotel and retail segments were particularly dynamic. For 2025, it appears that most of the revaluations will have already taken place, as interest rates are already at levels close to the new equilibrium. Still, the sector will continue to attract investment opportunities. Spain is positioning itself among the most attractive destinations for international investment in commercial real estate, thanks to solid macroeconomic fundamentals that will remain attractive throughout this year.

The shortage of housing supply in a context of strong demand will remain one of the main challenges of Spain’s real estate market in 2025, although it is not among the most overvalued markets in the European Union.  

The indicators show that the growth rate of Spain’s tourism sector is normalising after the exceptional figures of 2022-2024, driven by the post-pandemic recovery and the consequent rebound in the consumption of services. The trends observed at the end of 2024 are continuing in 2025: the sector remains attractive to a growing number of international tourists, while the presence of resident tourists in local destinations is diminishing in favour of increased prominence abroad. Even so, this year the sector will once again be key for the Spanish economy. According to our forecasts, tourism GDP will grow by 2.7%, thanks to the solid start to the year, the increase in household disposable income, the revival of some European economies and the moderation of tourism inflation.