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Granada's residential property market shows no signs of declining in the near term, with prices continuing their strong upward trajectory through 2025.
Based on current market data and expert analysis, house prices in Granada are expected to maintain their growth momentum over the next 6-12 months, driven by sustained demand, limited inventory, and favorable economic conditions despite some cooling measures being implemented by local authorities.
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Granada's property market remains robust with €2,507/m² average prices representing a 16.7% annual increase, while inventory constraints and 36-day average selling times indicate strong demand.
Local analysts predict continued moderate growth of 4-6% annually through 2026, supported by infrastructure investments and steady foreign buyer interest despite potential regulatory changes.
| Market Indicator | Current Status (Sept 2025) | 12-Month Change |
|---|---|---|
| Average Price per m² | €2,507 | +16.7% |
| Properties for Sale | 161 units | +5.9% (monthly) |
| Average Selling Time | 36 days | -10% |
| Rental Prices per m² | €10.69 | +8.4% |
| Mortgage Interest Rates | 3.0-3.1% | -0.8% |
| Foreign Buyer Share | 14-15% | Stable |
| New Housing Units (2025) | 1,000+ units | New data |
What's the current average price per square meter for homes in Granada?
The average residential property price in Granada city stands at €2,507 per square meter as of September 2025.
This figure represents the price point for Granada's urban center and significantly exceeds the broader provincial average of €1,649 per square meter. The city center commands premium pricing due to its cultural attractions, university presence, and historic significance.
Granada's pricing positions it competitively within Andalusia's major cities, though it remains below Madrid and Barcelona levels. The current rate reflects strong demand for properties in prime locations, particularly those near the Alhambra, Albaicín neighborhood, and university district.
Properties in newer developments and well-renovated historic buildings command the highest prices, often exceeding the city average by 15-20%.
This pricing trend demonstrates Granada's growing appeal as both a residential destination and investment opportunity.
How has that price changed over the last 12 months?
Granada's residential property prices have surged by 16.7% over the past 12 months, rising from €2,148 per square meter in July 2024 to the current €2,507 per square meter.
This substantial increase reflects one of the strongest annual growth rates recorded in Granada's recent property market history. The growth has been particularly pronounced in the second half of 2024 and early 2025, with monthly increases averaging 1.2-1.4%.
The price acceleration stems from multiple factors including reduced inventory levels, increased tourism recovery boosting rental demand, and growing interest from both domestic and international buyers. University-adjacent areas and historic center properties have experienced even steeper increases, with some neighborhoods seeing 20-25% annual growth.
New construction projects have also contributed to price elevation, as developers price units based on current market conditions rather than historical costs.
This growth trajectory places Granada among the top-performing property markets in Andalusia for 2024-2025.
What's the forecasted price trend for the next 6 to 12 months from local real estate analysts?
Local real estate analysts project continued price growth of 4-6% annually through 2026, though at a more moderate pace than the current 16.7% annual increase.
The forecast indicates a gradual cooling from the current rapid growth rate, driven by affordability concerns and new housing regulations designed to increase supply. Market experts expect the monthly growth rate to stabilize around 0.3-0.5% rather than the current 1.2-1.4%.
New construction completions and affordable housing initiatives are expected to add market supply, creating modest downward pressure on price acceleration. However, underlying demand factors remain strong, including infrastructure investments and sustained tourism recovery.
Premium properties in central locations are likely to maintain stronger price growth, while outer areas may see more modest increases. The forecast assumes no major economic disruptions or significant changes to current mortgage interest rates.
Analysts emphasize that while growth will moderate, actual price declines remain unlikely given Granada's structural supply constraints and growing regional economic activity.
How many homes are currently on the market in Granada compared to last year?
Granada city currently has 161 homes for sale as of September 2025, representing a 5.9% monthly increase but remaining below pre-pandemic inventory levels.
The broader Granada region shows listings averaging 60-70 properties per week, significantly down from the typical pre-2025 average of 100-120 weekly listings. This inventory constraint continues to support price growth and rapid sales cycles.
Year-over-year comparisons indicate that while recent months have seen slight inventory increases, overall available properties remain 25-30% below historical norms. The limited supply particularly affects mid-range properties priced between €150,000-€300,000, which experience the highest demand.
New construction additions are gradually increasing supply, but absorption rates remain high due to strong buyer interest. Luxury properties above €500,000 show relatively better availability, while entry-level properties under €150,000 are extremely scarce.
The inventory shortage continues to be a primary driver of Granada's competitive market conditions and rapid sale times.
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What's the average time it takes for a property to sell right now?
Properties in Granada currently sell in an average of 36 days, representing a 10% reduction from the 40-day average recorded in 2024.
This selling timeframe places Granada among Spain's fastest-moving property markets, indicating strong buyer demand and competitive conditions. Well-priced properties in desirable locations often receive multiple offers within the first two weeks of listing.
Premium properties above €400,000 typically require 45-50 days to sell, while entry-level homes under €200,000 often sell within 20-25 days due to high demand from first-time buyers and investors. Properties requiring significant renovation may take 60-70 days to find suitable buyers.
The rapid sale times reflect both inventory shortages and active buyer interest from both domestic purchasers and foreign investors. Properties with modern amenities, good locations, and competitive pricing consistently sell faster than the market average.
Real estate agents report that properly marketed properties generate serious inquiries within 5-7 days of listing, with purchase agreements typically reached within 2-3 weeks.
How have mortgage interest rates in Spain changed in the past year?
Spanish mortgage interest rates have decreased significantly over the past year, dropping from 3.86-3.90% in late 2023 to current levels of 3.0-3.1% for new borrowers as of September 2025.
| Period | Interest Rate Range | Change from Previous |
|---|---|---|
| Late 2023 | 3.86-3.90% | Baseline |
| Mid 2024 | 3.05-3.64% | -0.25 to -0.81% |
| September 2025 | 3.0-3.1% | -0.76 to -0.90% |
| Fixed Rate Mortgages | 3.0-3.2% | Current range |
| Variable Rate Mortgages | 2.8-3.1% | Current range |
This decline in borrowing costs has significantly improved property affordability for buyers, contributing to increased demand in Granada's market. The reduction represents savings of approximately €150-200 per month on a typical €250,000 mortgage.
Banks are offering competitive terms to attract borrowers, with some institutions providing rates as low as 2.8% for customers with strong credit profiles and significant down payments. Variable rate mortgages tied to Euribor have become particularly attractive as European Central Bank policies support lower rates.
The improved financing conditions have enabled more buyers to enter Granada's market, particularly first-time purchasers and investment buyers seeking rental properties.
What's the current unemployment rate and economic growth trend in Granada's region?
Andalusia's unemployment rate has dropped to 16.1% as of Q1 2025, marking the first time the region has fallen below 17% since 2008, though it remains above Spain's national average of 10.3%.
This improvement represents significant progress for the region, with Granada specifically benefiting from tourism recovery, university-related employment, and growing services sector activity. The unemployment decline has supported housing demand as more residents gain stable income to qualify for mortgages.
Regional GDP growth is projected at 2.3-2.8% for 2025, driven by tourism resurgence, infrastructure investments, and expanding service industries. The €100 million transport infrastructure investment, including Granada Metro expansion, is creating employment opportunities and improving regional connectivity.
The economic improvements have strengthened local purchasing power, contributing to sustained property demand from domestic buyers. Service sector growth, particularly in tourism and education-related businesses, provides stable employment that supports mortgage qualification for local residents.
While unemployment remains elevated compared to national levels, the positive trajectory supports continued housing market strength and buyer confidence in Granada's economic future.
Are there any major infrastructure or development projects planned that could affect housing demand?
Granada is experiencing a major infrastructure boom with over €100 million invested in transport improvements, primarily focused on Metro expansion and regional connectivity enhancements.
The Metro expansion project will significantly improve access to previously less connected neighborhoods, potentially increasing property values in newly accessible areas. The enhanced public transportation network is expected to expand the practical boundaries of Granada's residential market.
Additional infrastructure developments include new hotel construction, urban modernization projects, and improvements to the historic center's accessibility. These projects are creating both short-term employment opportunities and long-term value enhancement for surrounding properties.
The infrastructure investments are part of broader regional development initiatives aimed at strengthening Granada's position as a major Andalusian economic center. Improved connectivity to other cities and enhanced local transportation are making Granada more attractive to both residents and businesses.
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These projects are expected to maintain housing demand pressure, particularly in areas directly benefiting from improved infrastructure access and connectivity.
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How many new housing units are being built or approved in Granada this year?
Over 1,000 new housing units are being built or approved in Granada during 2025, with 400 units specifically designated as affordable housing.
This construction volume represents a significant increase from previous years, driven by both private development and government affordable housing initiatives. The new supply is intended to address inventory shortages while providing options for different income levels.
Private developers are focusing on modern apartment complexes and townhouse developments in Granada's expanding neighborhoods, while public-private partnerships are delivering affordable units near transportation hubs. The construction activity spans from entry-level apartments to luxury developments targeting international buyers.
Despite this new supply, absorption rates remain high due to strong demand, preventing significant market cooling. The 1,000+ unit addition represents approximately 6-8 months of current sales volume, indicating that new construction will be absorbed relatively quickly.
Regional measures are also promoting conversion of unused commercial space to residential use, potentially adding additional units beyond new construction. This adaptive reuse approach helps maximize urban density while preserving Granada's historic character.
What percentage of recent property sales were to foreign buyers versus local buyers?
Foreign buyers account for 14-15% of property sales in Granada and the broader Andalusia region, with this percentage showing steady growth throughout 2025.
The primary foreign buyer groups include British, German, and Dutch nationals, attracted by Granada's cultural offerings, educational institutions, and relatively affordable property prices compared to other European destinations. Many foreign purchases are for second homes, retirement properties, or rental investment opportunities.
Local and domestic Spanish buyers represent 85-86% of transactions, including first-time homebuyers, families upgrading their housing, and domestic investors. The strong domestic demand reflects improved economic conditions and attractive mortgage rates.
Foreign buyer interest has increased due to Granada's international university reputation, historic significance, and growing tourism sector. Many foreign purchases cluster in central neighborhoods, university-adjacent areas, and properties with rental potential.
The balanced mix of foreign and domestic demand provides market stability, though potential regulatory changes regarding non-EU buyer taxation could impact future foreign participation levels.
How have rental prices in Granada changed in the past year?
Granada's rental prices have increased by 8.4% year-over-year, rising from €9.86 per square meter in July 2024 to €10.69 per square meter as of September 2025.
This rental growth reflects sustained demand from university students, young professionals, and tourists seeking longer-term accommodations. The tight rental market shows no signs of provincial declines, with most neighborhoods experiencing consistent upward pressure.
Central Granada locations command premium rental rates, often exceeding €12-13 per square meter, while peripheral areas range from €8-10 per square meter. Well-renovated apartments with modern amenities can achieve rates 15-20% above average market levels.
The rental market strength supports property investment appeal, as investors can achieve attractive yields while benefiting from capital appreciation. Short-term rental opportunities through platforms like Airbnb provide additional income potential, though regulatory changes may affect this segment.
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Rental demand shows particular strength in university-adjacent areas and tourist-friendly neighborhoods, driving consistent occupancy rates and supporting continued price growth.
Are there any recent or upcoming changes to housing or tax laws that could impact the market?
The Andalusian government has enacted Decree-Law 1/2025, which eases and incentivizes affordable housing development, including converting unused commercial space to residential use.
Spain is proposing significant tax changes for non-EU, non-resident buyers, potentially implementing a 100% purchase tax that could substantially impact foreign investment activity. These proposals are still under legislative debate and not yet fully implemented.
New tourist rental regulations are being developed, including non-transferability of short-term rental licenses and higher taxes on vacation rental properties. These changes could affect investment strategies for properties intended for short-term rental use.
The regulatory environment shows increasing focus on housing affordability and rental market regulation, potentially including rent control measures and expanded tenant protections. While specific details remain under development, these changes could impact rental yields and property investment returns.
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Investors and buyers should monitor these regulatory developments closely, as implementation could significantly alter market dynamics, particularly for foreign buyers and rental property investors.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Granada's property market demonstrates remarkable resilience with continued price growth, strong demand fundamentals, and improving economic conditions supporting sustained market strength.
While growth rates may moderate from current levels, the combination of infrastructure investments, limited inventory, attractive financing, and steady buyer demand suggests house prices are unlikely to decline in the foreseeable future.
Sources
- Indomio - Granada Capital Real Estate Market
- SpainEasy - Real Estate Granada
- Spotblue - Spain Real Estate Market 2025
- Global Property Guide - Spanish Mortgage Rates
- CaixaBank Research - Andalusia Economic Profile
- Hola Properties - Property Market Report March 2025
- Ashurst - Andalusia Housing Measures
- Spanish Property Insight - Foreign Demand 2025
- Platinum Legal Spain - Tax Reforms 2025
- Hola Properties - Holiday Rental Changes 2025