Is demand really shifting towards medium-sized cities in Spain?

Is demand really shifting towards medium-sized cities in Spain?

In the last three years, a statement has been repeated frequently: the Spanish real estate market would be experiencing a shift in demand from large capitals to medium-sized cities and peripheral municipalities.

But is it a post-pandemic conjunctural narrative or a structural trend supported by data? What the demographic figures say

According to the INE, in the period 2022-2025, population growth is observed in numerous intermediate municipalities close to large capitals. This is not a question of an emptying of cities like Madrid or Barcelona – which continue to grow – but rather a proportionally greater growth in metropolitan belts and medium-sized cities with good connectivity.

This phenomenon coincides with:

• Partial consolidation of hybrid teleworking
• Improvement of railway and road infrastructure
• Significant differences in price per square meter

Price differential: the real driver

The average price in consolidated capitals far exceeds that of comparable medium-sized cities in terms of quality of life.

In 2025, the College of Registrars reflected a national average price of €2,354/m² (+9.5% year-on-year). However, in large capitals this value can easily exceed €3,000–4,000/m² in certain districts.

The 25–40% difference in price per square meter between the capital and the satellite municipality generates a powerful incentive to:

• Young families with children
• Buyers selling for replacement
• Professionals who only need to travel 2–3 days per week

It's not just a cultural change: it's a rational financial decision. Sales and territorial redistribution

With 714,237 sales in 2025 (INE), the total volume remains high. The displacement does not imply a fall in capital, but rather a redistribution of relative growth.

In areas such as the Costa del Sol, the dynamic is even more particular: secondary municipalities with consolidated services and a better relative price have experienced greater interest, especially from foreign or national buyers not dependent on maximum financing. Structural change or temporary adjustment?

There are three indicators that point to a certain structural character:

• Persistence of partial teleworking in qualified sectors.
• Shortage of supply in capital that puts pressure on prices.
• Sustained improvement in infrastructure and services in medium-sized cities.

However, not all municipalities benefit. Connectivity, the network of services and the educational offer are determining factors. There is no “generalized boom”, but rather specific micro-markets.

The shift in demand is not massive, but it is relevant. For the investor, this means:

• Identify municipalities with real demographic growth, not just speculative.
• Analyze future land supply and promotions.
• Assess future liquidity and absorption capacity.

For the seller, it means that the relative value of their location may change faster than historical prices indicate.

We are not facing an abandonment of capital, but rather a strategic redistribution of demand. The market does not expand homogeneously: it is reconfigured.

Own analysis from public sources

INE – Property Rights Transfer Statistics 2025

https://www.ine.es/dyngs/Prensa/ETDP1225.htm

College of Registrars – Real Estate Registry Statistics 2025

https://www.registradores.org/actualidad/portal-estadistico-registral/estadisticas-de-propiedad