Canals Housing

Spain’s current housing-price upswing is, to a significant extent, a demographic story: more residents competing for a housing stock that is expanding too slowly. Institut Nacional d’Estadística+1
A key input into that demand is net immigration: Spain recorded a +626,268 net external migration balance in 2024. Institut Nacional d’Estadística
When population and household formation accelerate faster than supply, the pressure transmits into higher prices and rents, especially in constrained markets. BDE
This reinforces the core point: demographics are a fundamental driver of housing cycles.
My model had already projected that, for roughly 20 years from 2007, the national average price would not sit far above the 2007 level.
But it also anticipated that as 2027 approached, prices could reclaim the 2007 threshold and then move beyond it as demographic pressure reasserted itself.
Recent readings are consistent with that “re-acceleration into 2027” mechanism.
Specifically, Q3 2025 reached ~€2,153/m², above the prior high of Q1 2008 (~€2,101/m²). Idealista

Observe the following chart that relates GDP increases to elections in Spain:

It is created by myself based on data from the INE.

What do you observe? I see two major fluctuations. Are they casual? Are they random? What interests a government in a period of crisis? At a minimum, to appear as if the economy is improving. To make it seem that in the last two years of the legislature, it looks like the country is emerging from the crisis.

Well, this is exactly what the graph shows: both in Zapatero’s and Rajoy’s legislatures, they both let the country fall during the first two years to be able to spend more during the last two.

How can they do this? By making cuts and raising taxes during the first two years to be able to spend the “gathered” money during the last two. The result: A falsely apparent recovery: “We’ve pulled the country out of the crisis.”

A false recovery because in the end, the process returns to the starting point: during Rajoy’s legislature, the economy has not improved significantly, even though the last months may seem otherwise.