Spain is back on the radar of global real estate investors, with new asset types and international capital propelling it to second place in Europe behind only the UK.

Spain is once again back in the spotlight for global real estate investors, as new housing asset types—such as flexible rentals and student residences—quickly gain traction in a market increasingly fuelled by international capital. According to participants at the 2025 edition of SIMA and its professional forum SIMAPRO, Spain has firmly re-established itself as a top investment destination in Europe, second only to the UK.

All eyes on ‘Living’

One of the key takeaways from SIMAPRO’s ‘Living Investors Day’ was the robust appetite for so-called ‘living’ assets—that is, residential properties designed for evolving occupier needs, from co-living and build-to-rent through to student accommodation and senior living.

Patricia García de Ponga of CBRE noted that €4.3 billion was invested in Spain’s living sector in 2024, highlighting a broader European trend captured in CBRE’s 2025 European Investor Intentions Survey, which places Spain second on the continent for investment potential. Madrid and Barcelona rank in the top 10 preferred European cities for real estate investment, reflecting strong urban demand and broader confidence in Spain’s stable legal and institutional framework.

But experts are also urging policymakers not to rest on their laurels. To fully capitalise on growing interest, investors highlighted the ongoing need for faster urban planning and more agile project financing to expand housing supply and reduce entry barriers.

Student housing takes centre stage

One of the standout segments is student housing. According to the ‘Student City Index’ from investment manager Patrizia SE, Spain—particularly Madrid and Barcelona—has cemented its place among Europe’s top destinations for student residence investments, due to both solid demand and long-term growth potential. With over 180 European cities analysed, Spain’s positioning reflects not only its high-performing academic hubs but also international students’ preference for quality of life.

Notably, Spain’s strengths—access to EU residency, multilingual education, and a desirable climate—make student housing particularly attractive for institutional investors seeking diversification with moderate development risk and stable occupancy rates.

Luxury real estate: A runaway train

Another unstoppable force in Spain’s property market is luxury housing. Data from The Simple Rent indicates a 28% annual rise in high-end property sales, with domestic hot spots ranging from Madrid’s Salamanca, El Viso, and La Moraleja districts to well-known coastal enclaves like Marbella, Sotogrande, and the ever-expanding markets of Ibiza and Mallorca.

Who’s buying? Latin Americans lead the charge, accounting for 41% of foreign purchases in this segment—especially buyers from Mexico, Colombia, and Venezuela—while 26% come from Western Europe. Their motivations are clear: lifestyle, access to EU residency, and a stable legal environment.

Prices are booming too. Sonia Campuzano, CEO of The Simple Rent, says: “Every week a property sets a new price record and sells almost immediately. In prime locations, buyers sometimes wait months just to buy one specific home.”

Companies like LuxuryEstate.com confirm that this segment is behaving as a “safe haven” for wealth protection—resisting broader economic slowdowns and interest rate shocks thanks to high liquidity and growing appetite from international ultra-high-net-worth buyers.

Beyond Central Madrid: Valencia, Málaga, and the new wave

While Madrid and Barcelona remain bellwethers, other Spanish cities like Valencia and Málaga are rising stars on the investment radar. Experts at SIMA highlighted the role of economic growth, international appeal, and “micro-market” understanding in driving newcomers into the limelight.

Importantly, much of this inbound investment is happening via joint ventures, co-investment structures, and participation in listed developers. In this way, foreign capital not only flows into Spanish real estate but helps shape its evolution—supporting regeneration projects, affordable housing delivery, and innovative rental schemes.

Investing with purpose—and perspective

José Manuel Albaladejo of Kroll cautioned investors not to assume the market is booming across all categories. “It’s not optimism, it’s pragmatism. Spain is outperforming in a globally low-activity landscape. ‘Value-add’ opportunities—where investors can transform or reposition properties—remain far more attractive than stable, income-only ‘core’ assets.”

Higher financing costs, particularly for leveraged real estate deals, are pushing investors to seek greater returns—but Spain’s upbeat GDP forecast and solid fundamentals make the country a rare gem amid slower-moving European peers.

A market that rewards speed and knowledge

As SIMA’s director Eloy Bohúa puts it, Spain today is more than just a warm place to buy a home—it’s a global real estate magnet. With delegates from 35 countries attending SIMA 2025 (more than doubling last year’s 17), and over 20% of exhibitors promoting international opportunities, foreign appetite is stronger than ever.

But the message is clear: success will favour investors able to navigate Spain’s regional planning environments, understand local demand dynamics, and act quickly in increasingly competitive sub-markets.

Spain may be back on the map—but this time, buyers need more than sunshine and sentiment to play the game successfully.