Second-home prices soar 12% on the coast in 2025, fuelled by high-end demand and tight supply, according to the latest Tinsa report

Holiday home prices on the Spanish coast surged by 12.1% in the first quarter of 2025 compared to the same period last year, driven by a limited supply of new builds increasingly aimed at affluent second-home buyers, according to the latest ‘Vivienda en Costa 2025’ report published by Tinsa by Accumin.

Based on valuations in more than 250 coastal municipalities, Tinsa found that the average price of second homes reached €2,970 per square metre, significantly outpacing the overall growth rate of 7.2% for both main and secondary residences combined. That broader figure was close to the national average of 7.8%, but the headline-grabbing increase in the holiday home segment is a clear sign of how investor demand continues to reshape the coastal housing market.

Hotspots and price peaks

The most intense price increases were observed in the coastal areas of Málaga (+14.3%), Pontevedra (+11.2%), and Santa Cruz de Tenerife (+10.8%), making them the top-performing locations in terms of annual growth, whether for first or second homes.

The report also highlights that 32 coastal municipalities have now surpassed their pre-2008 property bubble price peaks in nominal terms. However, when adjusted for inflation, only five municipalities in the Balearic Islands have reached new real-term highs—suggesting that while prices may look extreme, they are still not as overheated as they were during the last boom.

Demand strong but shifting inland

Despite coastal home sales rising 7.2% in 2024 and construction activity remaining high, building permits for new homes fell by 2.1%. Tinsa notes that the coast’s share of total national activity declined slightly due to growing housing demand in employment hubs further inland.

The report attributes the current price momentum to a mix of falling interest rates, strong labour market performance, accumulated household savings, and rising tourism. But it also points to structural tensions in the market—particularly for locals in need of a main home.

Locals priced out by holiday home boom

Cristina Arias, head of research at Tinsa by Accumin, warns that the expansion of the high-end holiday home segment is pushing out primary residence buyers in many areas. “With limited housing supply, we are seeing first-home demand displaced by second-home buyers with greater purchasing power, and by the higher returns available in the holiday rental segment,” she explains.

“This dynamic is driving up average prices and reducing the availability of housing for permanent residents on the coast,” she adds. “In this context, it becomes essential to reconcile the needs of permanent housing with holiday use and tourism dynamics in a sustainable way.”

Tinsa’s report paints a picture of a two-speed market, where sun-seeking buyers with deep pockets continue to fuel price growth, while local buyers struggle to compete—especially in the most desirable seaside locations. As tourism remains strong and demand for second homes stays high, the pressure on coastal housing markets is unlikely to ease any time soon.