Homes are selling faster than ever before: in just 73 days!

In Madrid, apartments are bought in the first two months after the listing is published, according to a report by Tecnocasa and Pompeu Fabra University.

Property in Spain is selling at record speed. According to the XL Housing Market Report, prepared by the Tecnocasa Group and the Pompeu Fabra University (UPF), in 2024 the average time to close a transaction fell to 73 days, the lowest ever since 2017. This result reflects the high demand that characterizes the current property market, driven by a combination of factors such as falling interest rates, rising average mortgage sizes and limited supply. In the cities where the market is most tense, the average time is even shorter. In Madrid, apartments are sold within the first two months of being put on the market, while in Bilbao and Barcelona this period is 61 and 68 days respectively.

The speed with which homes are being purchased is a clear sign of the real estate boom sweeping the country as demand has increased by almost 40% in a year, according to the report. “Properties barely have time to appear on the lists before they start to receive multiple offers and there is a real fight for them,” explains José García Montalvo, a professor of economics at Pompeu Fabra University. While the number of home buyers has increased sharply, supply has fallen by almost 10% in a year, so in Spain, the analyst says, “the market is boiling. And what we see is that demand significantly exceeds supply, which remains insufficient.”

Over the past 15 years, approximately 275,000 households have been created each year in Spain, while the housing supply has been around 120,000 units. Although this low supply growth since the financial crisis has been attributed to the presence of unsold housing stock, this stock has long been absorbed or is located in areas of low demand. As the Bank of Spain noted in its most recent report on the real estate sector last year, the housing deficit exceeds 600,000 units, indicating a structural imbalance between supply and demand.

In this context, where housing supply is highly dependent on demand, it is likely that the market dynamics will continue. “Without a coherent and long-term housing policy, affordability issues for certain vulnerable groups will continue to be relevant,” insists Montalvo. At an international level, the behavior of the Spanish market contrasts with the situation in other European countries. While in Germany and France, housing prices have fallen in recent quarters due to the economic slowdown, in Spain prices continue to rise rapidly, which, according to the expert, is the result of the economic recovery.

Strong demand has also meant that prices continue to rise, with an annual increase of over 10% in 2024 for existing homes, which make up the bulk of the housing stock. By the end of the year, the average sale price was €2,802 per square metre, still far from the 2007 level, when the price per square metre was approaching €3,500.

As prices rise, the average mortgage amount has reached a record high for 14 years. Last year it was €130,894, up 11% year-on-year. Lower interest rates have boosted mortgage lending, allowing buyers to take out larger loans, although they are still a far cry from the €180,000 that were issued during the housing bubble.

This difference is not so much due to the fact that housing has become cheaper, but rather to the fact that banks have begun to provide more modest loans. In fact, analysts emphasize that the Spanish mortgage market remains within the framework of credit prudence. Unlike the events preceding the crisis, when banks issued loans with a loan-to-value ratio of over 100%, today prudence still determines the process of granting mortgages.