Spain’s Interior Regions Power Housing Market Surge to 2007 Levels in 2025

In 2025, Spain's real estate market experienced its strongest performance in 18 years, with over 700,000 housing transactions — a peak unseen since the 2007 bubble. Contrary to traditional expectations focused on big cities, the growth was predominantly driven by interior regions. Castilla y León led with an 18.9% increase, reporting more than 5,800 sales, followed by Castilla-La Mancha at 17.8% with 35,379 transactions. Other notable interior provinces like Zamora saw a remarkable 39.4% rise, while La Rioja and Extremadura posted gains above 16%. This expansion contrasts sharply with major urban centers; Madrid’s growth was a modest 4.8%, and Catalonia and Andalucía recorded under 15% increases. The upward trend is bolstered by innovative public-private initiatives aimed at repopulating rural areas, such as Paredes de Nava’s affordable housing projects. However, persistent supply shortages—highlighted by the Bank of Spain's estimate of a 700,000-unit housing deficit—are pushing prices upwards and may lead to a sales normalization in 2026 as some buyers delay purchases amid ongoing mortgage affordability challenges. Experts emphasize the need for stable, long-term housing policies to overcome regulatory bottlenecks that have stalled planned constructions. This housing dynamic intertwines with broader economic factors, as Castilla-La Mancha and Spain overall anticipate GDP growth near 2.5% in 2023, driven mainly by employment increases but constrained by stagnant productivity. The housing market's tight conditions remain a critical economic bottleneck, affecting purchasing power and underscoring the importance of strategic planning to sustain growth and revitalization in Spain's interior regions.