Housing prices continue to soar, recording their largest increase in 18 years.

BarcelonaHousing prices in both Catalonia and Spain as a whole continue to rise, and in the first quarter they registered their largest increase in 18 years, according to data from the Housing Price Index (IPV), published this Friday by the National Institute of Statistics (INE).

Thus, in the first three months of this year, housing prices in Catalonia rose 11.7% compared to the same period in 2024. This is the largest increase recorded since 2007, the first year for which data is available.

In Catalonia, the price of newly built apartments rose by 12% compared to the first quarter of last year, while the price of second-hand apartments rose slightly less, by 11.6%. Compared to the previous quarter, the cost of a new home shot up by 6.9% in Catalonia in just three months, and that of a second-hand home by 3.3%.

In Spain, the average increase was even higher, 12.2%, but it did not surpass the record of the first quarter of 2007, when housing became 13.1% more expensive. Compared to the previous quarter, the increase was 3.5%.

By type of home, new homes also rose 12.2% year-over-year on average in Spain, and existing homes rose 12.3%. Compared to the fourth quarter of 2024, prices rose 5.5% and 3.2%, respectively.

Prices above the peak of the bubble

The annual increase is not only the strongest in the last 18 years, but with this increase, the average housing price in Catalonia has already surpassed the peak recorded during the real estate bubble of the early 21st century. Thus, in the first quarter of this year, prices were 2.88% higher than the second quarter of 2007, which until then was the all-time high, according to IPV data.

Last month, the Bank of Spain published a study detecting certain imbalances in the real estate market—primarily in housing—which had also accelerated in recent months: at the end of last year, housing prices in the country were between 1.5% of what it considers the long-term equilibrium price should be, a deviation that had more than doubled in just six months.

The organization chaired by José Luis Escrivá noted that, in a context where there was already strong demand for homes, the European Central Bank (ECB) has been cutting interest rates for a year. In fact, the latest reduction in the price of money was approved this Thursday.

As usual, this rate reduction has had a direct impact on the Euribor, the reference interest rate for bank loans in the eurozone. Thus, the Euribor has also been falling and, therefore, has facilitated access to mortgages for families, which further pushes up the demand for homes.

On the other hand, the monetary institution has also recently indicated that between 2022 and 2024, Spain accumulated a deficit of between 400,000 and 450,000 homes.