Spanish Real Estate Market: Trends and Outlook
By 2030, investment in residential and commercial real estate development in Spain could exceed 52 billion euros. That’s nearly 50% more than in 2024, when investments reached 35 billion. This growth is driven by the rapid rise of alternative financing and steady demand for housing amid ongoing demographic changes.
Changes in Financing Structure: New Players and Trends
In recent years, the share of alternative capital sources in the market has grown noticeably. Previously, banks accounted for up to 90% of all investments, but by 2030 their share may decrease to 51-53%. At the same time, alternative financing methods such as crowdfunding and private funds already make up as much as 40% of the market and continue to gain ground. Direct investment from developers remains stable at around 10% of total volume.
Demographic Challenges and Housing Demand
According to experts, the housing shortage in Spain exceeds 700,000 units. By 2030, the country’s population is expected to surpass 51 million, which will further drive the need for new apartments and houses. The main demand is for residential properties—they account for 88% of all projects currently in development. Industrial and commercial projects make up 31% and 25% respectively, while investments in offices and parking facilities stand at 19% each.
Dominance of the ‘build to sell’ model and new approaches
Most investors still prefer projects geared toward the sale of completed homes, with this segment accounting for 70% of all new constructions. The ‘build to suit’ and ‘build to rent’ formats represent 15% and 9% respectively. Experts note, however, that alternative sources of financing help launch projects more quickly, especially in a market with limited supply and strong demand for housing.
Accessibility and Regulatory Challenges
Despite growing investment, a significant number of prospective buyers cannot afford to purchase housing at current prices. This issue is particularly acute for newcomers to the country arriving via immigration. As a result, even with strong demand, sales of new properties do not exceed 70–80%. Market participants believe there is a need to expand affordable housing initiatives and improve financing mechanisms.
Impact of Administrative Barriers and Material Costs
Developers report that site preparation can take up to six years due to lengthy approval procedures. The lack of ready-to-build plots and unstable prices for construction materials increase risks for investors. Experts believe that speeding up administrative processes and stabilizing the materials market would attract more capital and accelerate efforts to meet housing needs.
Competition and the Future of the Market
In the coming years, competition between banks and alternative investors is expected to intensify. Increasingly, more projects—including affordable housing—are likely to be implemented using new financial instruments. At the same time, investment returns may decrease as the market stabilizes and interest rates fall. Market participants agree that further progress is only possible through joint efforts from all stakeholders and with government support.
