The economic and financial panorama in Europe is experiencing a new twist with the recent lowering of interest rates by the European Central Bank (ECB), which has reactivated one of the great engines of the real estate market: financing.
The improvement in mortgage conditions is favoring the return of certain buyer profiles that, in recent quarters, had been excluded due to the increase in credit costs.Among them, young buyers stand out, as they are beginning to re-enter the home-buying process.
Low rates and demand reactivation
According to data from Fotocasa, 21% of current demand has been directly incentivized by previous improvements in interest rates.Even more revealing: 7% of recent buyers purchased a home without originally planning to, driven by the new market conditions.
At QUALITY KEYS INMOBILIARIOS, we have noticed how this change in the financial context has brought many potential buyers back to the market, especially young people.In fact, 1 in 3 young people who have recently bought a home did so thanks to more accessible mortgages.
What do the data say?
Ibercaja’s analysis reinforces this trend: a looser monetary policy has generated a notable expansion of buying and selling operations, even in an environment where the margin for continuing to reduce rates might be running out.If the ECB stabilizes its reference rate around 2%, it is possible that this expansive phase will moderate, but the current effects are already palpable.
In parallel, Tinsa by Accumin reports that the average price per square meter in Madrid capital has increased by 6.2% year-on-year in the first quarter of 2025, showing how demand is once again beginning to put pressure on prices, especially in consolidated and high-demand areas.
Mortgages: Is there a silent war?
Although the Euribor has fallen, the banks have adopted a cautious position.There are no significant visible discounts in the catalog offers, but there are more competitive conditions in personalized negotiations.According to data from iAhorro and HelpMyCash, the best profiles are accessing fixed-rate mortgages starting from 1.4%–1.5%, and variable-rate ones from Euribor +0.25%.
This confirms that, although the context has improved, access to the best conditions remains reserved for profiles with high creditworthiness.Moreover, geopolitical factors (such as the U.S. tariff threat on the European industry) continue to generate uncertainty, leading the banking sector to remain cautious.
What to expect in the short term?
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Greater dynamism in buying and selling over the next few months.
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Opportunities for profiles that previously could not access the market.
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Possible upward pressure on prices if supply does not increase in parallel.
This last point is crucial: if supply does not keep pace with demand growth, the risk of a new price bubble will be real.Housing policy, both at the state and local levels, will be crucial to achieving the necessary balance.
Opportunity or risk: balance is key
We are facing a window of opportunity.Financing conditions are once again favorable, but the environment demands analysis, prudence, and strategy.At QUALITY KEYS REAL ESTATE, we advise our clients to take advantage of this context from a realistic and personalized perspective, minimizing risks and maximizing opportunities.
Sources consulted:
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El Economista (04/18/2025): www.eleconomista.es
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Fotocasa – Demand Report 2025: www.fotocasa.es
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Ibercaja – Mortgage Analysis Q1 2025
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Tinsa by Accumin – Madrid Price Report Q1 2025: www.tinsa.es
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Banco de España – Economic Bulletin
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iAhorro – Mortgage Comparison April 2025: www.iahorro.com
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HelpMyCash – Mortgage Market Monitor
