Between 1995 and last year, Spanish house prices tripled in nominal terms, and doubled in real terms. Several explanations have been offered: a trend for young people to leave their parental homes earlier; a rise in immigration; and the country's popularity among northern European homebuyers. But beware of demand-side arguments. They are usually cyclical, and the cycle is just turning. Also, as supply increases with demand, there is now a glut of unsold homes.
I would expect real Spanish house prices to fall by almost as much as they have risen over the past 10 years. If one looks at real house prices in the US or Germany over very long periods, one finds that they have been virtually flat - as they should be.
The cost of building a house is relatively constant, and the land is not used for productive work. The purchase of a home protects its investor against inflation, for sure. But as long as the housing supply is relatively elastic, housing prices should not rise in real terms. Since Spain still happily generates fairly robust rates of inflation, the impact on nominal prices will be somewhat less severe.