Three developments are shaping the market right now: the European Central Bank has raised rates for the first time in almost three years, Euribor is trading at levels not seen since 2024, and house prices in Madrid have reached a new record. They are best read together, because the effect on those buying, selling or investing is not the same in each case.
The ECB breaks three years of calm
On 11 June the European Central Bank raised its key interest rates by 25 basis points — its first increase since 2023. The deposit facility now stands at 2.25% (Banco de España). The move responds to inflation that has picked up again across the eurozone and that the bank does not consider settled, so the implicit message is one of caution: cheap money has stopped getting cheaper.
Euribor at its highest since 2024
Spain's benchmark mortgage index reacted immediately. June's provisional average is around 2.81% — on 21 June it stood at 2.809% — its third consecutive monthly rise and a level last seen in September 2024 (Euríbor Diario, Rankia). For a variable-rate mortgage reviewed annually, the increase is in the region of 60 euros a month versus a year ago; that is an indicative estimate, dependent on each loan's spread and outstanding balance. Buyers who finance should review the alternatives calmly: fixed and mixed-rate mortgages still offer competitive tranches, and locking in terms is worth more today than it was a few months ago.
Madrid: a new price record
In parallel, the average price of second-hand housing in the capital hit an all-time high in May, above 5,980 €/m² (Idealista). In the prime segment, industry forecasts point to further appreciation this year — Savills places Madrid among the European cities with the largest projected rise, in an estimated range of roughly 4%–6%. These are projections, not closed figures, but they confirm a trend we see on the ground: high prices, more selective increases than in parts of 2025, and increasingly filtered transactions, where the quality of the asset and the address matter more than ever.
For the international buyer
The government's proposal to apply a surcharge of up to 100% on home purchases by non-resident, non-EU buyers remains on the table. Its status is worth stating precisely: it is a 2025 announcement that, to date, has neither been approved nor entered into force, and that faces clear constitutional doubts. Today a non-resident buyer pays the same purchase taxes as a resident, with no surcharge for being foreign. The sensible course is to follow the matter closely without rushing decisions over a headline: in transactions of this profile, specific and up-to-date tax advice is part of the work.
At Horlux we approach every transaction with the day's data, always distinguishing what is confirmed from what is still a forecast. If you are weighing a purchase, a sale or an investment in this environment, let's discuss your specific case calmly.
Shall we discuss your next move?
Contact Horlux