Why choose property investment in Spain?

Property investment in Spain is especially attractive in a residential market that is booming. According to CBRE data, this segment accounts for 23% of all real estate investment in the country, consolidating itself as the main focus. In the first half of 2025, the transaction volume exceeded €1.72 billion, 14% more than the previous year, marking the second-best start to a year on record.

This growth reflects the sustained interest of investors, supported by structural demand and the potential for real estate investment returns, which continues to drive capital inflows into the sector. In this article, we will analyze the factors that explain the strength of the residential market, the opportunities it offers, and the key considerations to maximize results when you invest in an apartment.

Reasons to choose property investment in Spain

Property investment in Spain is not a passing trend, but rather the result of structural factors that have sustained its growth even across different market conditions. This solid foundation has supported both transactional activity and the revaluation of assets.

High demand 

Housing demand in Spain remains at historically high levels and shows no signs of slowing down. Factors such as demographic growth —driven largely by immigration— and the increase in single-person households have intensified housing demand in major cities.

Over the past five years, the country has recorded an accumulated growth of more than 40% in its foreign population, which has reinforced the pressure on the residential market and strengthened the appeal of investing in an apartment. Moreover, since 2022, the interest to buy apartment in Spain has experienced an unprecedented boom, surpassing rental demand and marking a shift in preferences among Spaniards, according to Fotocasa.

Limited supply in consolidated urban areas 

The housing stock in Spain is not growing at the same pace as market needs, especially in major capitals and their most established districts. The administrative difficulty of developing new housing, combined with the lack of available land in central areas, creates a structural imbalance between supply and demand and supports medium- and long-term revaluation.

This mismatch results in significant price increases. According to Idealista, in the past year the price of second-hand housing in Spain rose by more than 14% year-on-year, with even higher peaks in the main cities — in Madrid, prices increased by +23%.

High asset liquidity

Property investment is also characterized by its high liquidity compared to other real estate segments. Cities such as Madrid, Barcelona, Malaga, or Valencia concentrate a large share of transactions and show a dynamism that facilitates the turnover of operations. In these areas, the combination of strong national and international demand ensures rapid product absorption, reducing commercialization times after rehabilitation or repositioning investments.

This ability to sell more quickly makes consolidated urban areas magnets for investors looking to buy apartment in Spain. Liquidity, combined with price appreciation, reinforces the appeal of value-add or flip operations, where execution and sales times are faster — a decisive factor in maximizing real estate investment returns.

High real estate investment returns

Operations in the residential segment can achieve returns of over 20% in prime areas, as demonstrated by successful cases developed by balize in El Viso (Madrid) and Eixample (Barcelona). These projects reflect the potential to generate added value through repositioning and rehabilitation strategies.

In recent years, formulas such as value-add or flipping —which aim to add value to second-hand homes through renovations and improvements— have gained prominence in the Spanish market. Their rise is linked to the shortage of available housing, the limited construction of new developments, and the lack of land in consolidated urban areas.

Discover the best areas to invest in an apartment in Spain.

What should you evaluate before property investment in Spain?

Before property investment in Spain, it is essential to carry out thorough due diligence to identify risks and validate the viability of the operation. This process involves a technical, legal, and financial analysis that provides security and transparency to the investment.

Legal and technical due diligence  ensures that the property complies with current regulations, that there are no hidden liabilities, and that the asset is in proper condition.

Financial due diligence makes it possible to assess the expected profitability, analyze associated costs, and project possible scenarios for real estate investment returns.

Having this prior analysis not only minimizes risks but also enables informed decision-making and increases the profitability of the investment when you buy apartment in Spain.

Conclusion

The residential market in Spain is going through a cycle of strong dynamism, supported by structural factors such as growing demand, limited housing supply in consolidated areas, high asset liquidity, and real estate investment returns.

In this context, property investment in Spain represents an attractive opportunity to generate value, especially through repositioning and flipping strategies, with returns in well-executed operations that can exceed 20%.

However, achieving these results requires a very rigorous approach, which includes identifying key locations and carrying out a detailed analysis of each project. Having a team of specialists makes the difference, and at balize we stand out for offering comprehensive management of operations, ensuring maximum efficiency in the selection, renovation, and commercialization of properties. Discover investment opportunities with +15% returns.