Real Estate Market: Slower Transactions Amid Rising Prices
Over the next two years, Spain is expected to see a marked slowdown in home sales. Experts cite the limited supply of affordable apartments and houses as the main reason. According to BBVA Research analysts, the number of transactions is projected to grow by just 0.5% in 2025 and by no more than 0.3% in 2026. Meanwhile, the price per square meter will continue to rise: a 10% increase is forecast for next year, and a further 7% in 2026.
The situation is compounded by insufficient new construction. Although housing completions are expected to jump by 10% in 2025 and another 12% in 2026, this is still far from enough to meet demand. In the first half of 2025 alone, property prices have already risen by nearly 10% compared to the same period last year. However, even at this pace, real estate prices remain a third below their 2007 peak in real terms.
Rent Prices Climbing Even Faster: Causes and Consequences
The supply shortage is felt not only in buying and selling, but also in the rental sector. Between 2019 and the second quarter of 2025, average rents rose by 34%, far outpacing the 22% increase for properties for sale over the same period. This trend is driven by a mix of long- and short-term factors, including slow land development, complex regulatory procedures, and a shortage of skilled construction professionals.
High costs and relatively low profitability compared to other eurozone countries are holding back investment activity. These challenges are particularly acute for small and medium-sized companies, which form the backbone of the construction sector. Sales in relation to total assets remain low, and the lengthy project implementation cycle forces developers to rely mainly on their own funds, which slows down returns on investment.
Structural challenges: regulation, investment, and a talent shortage
To make the market more attractive, experts recommend speeding up the process of transforming land plots and simplifying regulatory procedures. They also highlight the need to reduce operating costs for companies and improve efficiency. In recent years, the market has faced increased uncertainty due to changes in rental regulations, restrictions for major landlords, and a failed attempt to reform land legislation. All this raises risks for investors and hinders sector development.
A serious problem remains the shortage of skilled workers. The construction sector still lacks key professionals — from bricklayers to electricians. Immigration partially compensates for this deficit, but the absence of effective training and employment support programs limits growth opportunities. Experts believe that without coordinated efforts from the authorities and businesses, it will not be possible to solve the staffing issue in the medium term.
Plans for the Future: Coordination and Reforms
The national housing development plan for 2026–2030 provides for increased funding, but the lack of coordination between different levels of administration may hinder achieving the set goals. Experts emphasize that to stabilize the market and ensure housing affordability, comprehensive structural reforms and both political and institutional consensus are needed.
