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REAL ESTATE BUBBLE
The Bank of Spain notes that there are some signs of a housing bubble, but the situation is far from comparable to 2007.
Housing prices remain about 20% below their pre-crisis peak, and current increases are mainly due to limited supply and strong demand. There is no excessive indebtedness, and price rises are concentrated in areas with tight supply, such as the islands. Spanish households are financially stronger, banks apply strict mortgage criteria, and overall debt risk remains moderate. By the end of 2025, only 15.8% of households are expected to face high financial pressure. The report also warns of high public debt and the absence of national budgets, which makes spending control difficult. Digitalisation, geopolitical tensions, ageing and the green transition demand resources that are essential to maintain fiscal balance.
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