Market dynamics: demand remains high, supply lags behind
Over the next two years, the Spanish real estate market will continue to see rising housing prices. BBVA analysts point out that despite a slight slowdown in buyer activity, apartment and house prices will keep climbing. The main factors supporting this demand are job creation, increasing household incomes, and relatively accessible lending conditions. The formation of new families—both among locals and newcomers—also plays a significant role. Additionally, foreigners interested in a second home continue to look to Spain as an attractive option.
Construction is picking up, but the shortage persists
The construction sector is showing renewed activity: in 2025, the volume of new developments is expected to grow by 10%, and by another 12% in 2026. However, even this pace cannot fully meet the pent-up demand built up over recent years. Experts estimate that between 2021 and 2025, Spain will add about 625,000 new households, but available housing will suffice for only 45% of them. In the past year alone, the shortfall reached 134,000 units, and at the current pace, the gap between supply and demand will remain for years to come.
Prices keep rising: outlook for 2025 and 2026
With limited supply and steady demand, property prices in Spain are set to continue rising. According to BBVA forecasts, average prices will go up by 10% in 2025 and by another 7% in 2026. This trend is driven not only by domestic factors but also by strong demand from international buyers and a shortage of available listings.
Sales slow down: high prices and lack of options take their toll
Despite rising prices, the number of real estate transactions is gradually declining. In August 2025, just over 38,000 deals were closed nationwide, which is 1.3% less than a year earlier. This is the lowest figure in the past two years and marks the third drop in the last four months. Experts link this trend to a shortage of both new and resale properties, as well as high prices that are discouraging some potential buyers.
The construction sector faces new challenges
The market’s growth is being held back by several factors. These include regulatory uncertainty, a lack of prepared land plots, limited government investment, a shortage of qualified personnel, declining productivity, rising construction material costs, and reduced bank lending. Additional pressure comes from the increase in tourist accommodations, which affects the supply of long-term rental housing. Experts emphasize the need for coordinated government action and reforms capable of spurring construction and making housing more accessible to the public.
