Amidst the growing media noise about the potential formation of a bubble in Spanish residential real estate , this report analyses in an objective and rigurous manner the current situation of the sector. House prices in Spain have gone up 20% from lows posted in 1994. Against a backdrop of rising prices, both the general public and the media are starting to wonder and even get alarmed about the existence of a new “bubble”, especially after the dire consequences of the Spanish real estate bubble burst in 2007. This report is an attempt to shed some light on this issue.