In recent years, Spain’s real estate market has become increasingly segmented. In some regions, apartments sell in a matter of days, while in others, listings attract little attention for months. The reasons go beyond geography: much depends on who is entering the market. Some buyers have substantial savings, while others rely on loans and face significantly lower chances of success.
Experts note that Spain has long ceased to be a unified housing market. Different realities collide here—age, income level, savings, and even place of residence all determine how easy or difficult it is to buy a home. As a result, national averages reflect the true state of affairs less and less; behind the bare statistics lie sharp contradictions between regions and social groups.
Shortage of new housing
The construction sector is struggling to keep up with the growing number of new families. Over the past year, more than 219,000 new households have been formed in the country, but only about 128,000 construction permits were issued. This gap has already led to a cumulative housing shortage, which is estimated to exceed half a million apartments. The issue is especially acute in economically developed, densely populated areas, where demand consistently outpaces supply.
In locations such as Madrid, Barcelona, Valencia, and along the coast, market pressure is mounting for several reasons. First, the resale property market here is highly active, giving an advantage to those who already own real estate and can trade up for something new. Second, a steady influx of migrants keeps demand high, which cannot be met by new construction alone. As a result, young buyers—especially those without enough savings for a down payment—are finding it increasingly difficult to enter the market.
Different speeds
In contrast, the country’s interior regions display a much calmer trend. Price growth is slower and there is enough supply to meet demand. In provinces like Guadalajara, Toledo, Tarragona, Castellón, and Murcia, there has been a recent uptick: both transactions and price per square meter are rising, but they are still far from the records set in the capital and on the coast.
This process has been dubbed the “oil stain” effect—when demand gradually shifts from overheated urban centers to neighboring, more affordable areas. Once reasonably priced apartments in major cities dry up, buyers start looking in suburbs and surrounding provinces. This is reshaping Spain’s housing market map, where the line between ‘expensive’ and ‘affordable’ zones is becoming increasingly blurred.
Who can afford to buy a home
The question of housing affordability is increasingly reduced to the availability of personal funds. Those who can afford to buy property without taking out a loan find themselves at an advantage. For everyone else, the path to owning an apartment is becoming increasingly difficult: banks are in no hurry to ease lending terms, and prices are rising faster than incomes.
According to statistics, about 70% of transactions still involve mortgages, a figure that has barely changed over the past ten years. However, lending requirements remain strict, and the volume of loans granted grows only in proportion to the number of deals. As a result, young people and families without savings face a real challenge: even with stable jobs and good credit histories, getting mortgage approval does not guarantee success in the market.
Prices and risks
Despite all the challenges, experts see no signs of the market overheating. The number of transactions per thousand residents remains at 1.42—well below the peaks of the mid-2000s, but also far from crisis lows. Over the past year, prices have risen by almost 16%, and since 2019—by nearly 47%. However, this surge is explained not by speculation but by objective reasons: population growth, a shortage of new developments, and steady demand in dynamic regions.
At the same time, the situation remains stable in most provinces. There is neither a rush nor sharp price increases here. For those willing to consider less popular locations, opportunities to purchase property are still available, though they require more flexibility and readiness to relocate.
If you didn’t know, Metrovacesa is one of the largest development companies in Spain, operating in the residential real estate market for over a hundred years. The company is actively involved in the construction of new residential complexes, as well as in market trend analysis and research. Metrovacesa regularly publishes reviews and forecasts that are used by both professionals and private investors when making decisions to buy or sell real estate.
