The Spanish real estate market enters 2026 after a 2025 marked by record-high prices, a very high volume of property transactions and strong mortgage growth. At the same time, the structural housing shortage continues to put pressure on supply and prices. Today, we look at the main trends shaping the real estate market in 2026 from Quinta Avenida, from price developments and mortgage financing to the behaviour of international buyers and emerging housing models.
Property prices reach new record highs
Spain ended 2025 with the highest average housing price per square metre in its history. According to the Ministry of Housing and Urban Agenda (MIVAU), the average price of free-market housing reached €2,230/m² in the fourth quarter of 2025, an annual increase of 13.1%.
Other indicators also showed significant increases. Idealista’s used-home index placed the average price at €2,639/m², while Sociedad de Tasación valued new-build properties at €3,298/m².
There are significant differences between regions. The Balearic Islands, Madrid and the Basque Country are among the areas with the highest prices, while Extremadura and Castilla-La Mancha have considerably lower values.
Cities such as Valencia also experienced strong growth during 2025, with prices increasing by 15.3%, reflecting the pressure affecting the Valencian real estate market.
For 2026, analysts’ forecasts point towards further growth, although at a slower pace. Estimates cited by Selekta Properties range between 5% and 9.3%, depending on the source.
The real estate market maintains a high volume of property transactions
The number of home sales also performed strongly during 2025. Spain’s National Statistics Institute (INE) recorded 714,237 transactions, an 11.5% increase compared with 2024 and the second-highest figure in the historical series.
Existing homes accounted for most transactions, with 558,327 sales, while new-build properties reached 155,910 transactions, their best result since 2011.
For 2026, forecasts point towards a gradual normalisation of activity. Some estimates anticipate growth of between 4% and 6%, while others point towards stabilisation around current levels.
The evolution will depend, among other factors, on prices, financing conditions and buyers’ ability to access housing.
Mortgages and Euribor influence purchasing power
The mortgage market also experienced significant growth during 2025. A total of 501,073 mortgages were signed, 17.8% more than in 2024 and the highest volume since 2010.
The total amount of lending reached €82.044 billion, while the average mortgage stood at €163,738.
The average mortgage rate recorded in December was 2.87%, with fixed-rate mortgages accounting for 63.4% of the total. The average loan term was 25 years.
Meanwhile, the 12-month Euribor ended 2025 at 2.267% and stood at around 2.205% in February 2026. Forecasts cited in the report point towards possible stabilisation for much of the year, although its evolution will depend on ECB decisions and inflation.
The shortage of new-build housing remains a major challenge
One of the main challenges facing the Spanish housing market continues to be the gap between available supply and existing demand.
According to data compiled by Selekta Properties, Spain builds approximately 100,000 new homes per year, compared with estimated demand of between 200,000 and 275,000 units.
The difference is also reflected in prices. New-build homes cost an average of 44% more than existing properties, while purchasing a new-build property requires a greater financial effort from households.
Several obstacles make it difficult to increase construction, including the shortage of development-ready land, a lack of skilled workers, higher construction costs and the time required to complete new developments.
This shortage of supply is one of the factors maintaining pressure on property prices.
International buyers continue to play an important role in the real estate market
International demand remains one of the pillars of the Spanish real estate market. During 2025, foreign buyers purchased around 97,300 homes, a record in absolute terms.
British buyers were the largest group, followed by Moroccan, German, Italian and Romanian buyers. Other nationalities, including Portuguese, Dutch and American buyers, also recorded significant increases.
Alicante, the Balearic Islands, Málaga and the Canary Islands are among the markets where the presence of foreign buyers is particularly strong. The Valencian Community also continues to attract significant international demand.
The profile of international buyers can also involve different spending power. According to the figures included in the report, non-resident foreign buyers paid an average of €3,126/m², compared with €1,809/m² paid by Spanish buyers.
Regulation is transforming the rental market
The rental market remains one of the segments most affected by regulatory changes.
Spain’s Housing Law has enabled certain areas to be declared stressed residential markets, while various measures affect rent updates and tourist rentals.
Among the developments mentioned in the report are the Unique Registry for Tourist Rentals, changes affecting homeowners’ associations and the IRAV index used for updating certain rents.
This regulatory environment can have different effects on landlords, tenants and investors, making it particularly important to understand the current rules before carrying out a real estate transaction.
New trends: sustainable housing, technology and emerging residential models
The real estate sector is also undergoing a transformation driven by sustainability and new technologies.
Energy-efficient homes are becoming increasingly important due to both regulatory requirements and buyer preferences. According to the data compiled by Selekta Properties, properties with A or B energy ratings achieve higher prices than those with lower energy efficiency ratings.
The use of proptech and artificial intelligence is also expanding among real estate companies. These technologies can be applied to different processes, from property management and data analysis to communication with buyers.
At the same time, models such as build-to-rent, coliving and industrialised construction are gaining prominence as alternatives in response to the shortage of housing and growing rental demand.
Rental yields remain relevant for investors
Rental yields remain one of the main reasons why housing continues to attract investment.
According to the figures included in the report, the average gross residential rental yield stood at 6.7% at the end of 2025, although there are significant differences between cities and neighbourhoods.
While major markets have high purchase prices and more moderate yields, certain medium-sized cities and peripheral areas can offer higher returns due to more accessible entry prices.
The market is also seeing part of investment shift towards metropolitan areas and secondary cities, where the combination of purchase prices and rental demand can create different opportunities from those found in major capitals.
Demographics and immigration will continue to support housing demand
Demographic trends are another key factor in understanding the real estate market in 2026.
Spain reached a record population level in 2025, driven to a significant extent by immigration. At the same time, the number of households continues to grow, while their average size is declining.
According to projections included by Selekta Properties, the Valencian Community is among the regions expected to experience some of the strongest growth in the number of households in the coming years.
This population and household growth generates additional demand for housing, particularly in areas where employment, services and transport connections attract new residents.
Conclusion
The real estate market in 2026 starts from a position of strength but also faces significant challenges. Prices remain high, demand continues to be solid and international buyers maintain an important role, while the shortage of housing supply remains one of the sector’s main structural problems.
Financing, rental regulation, sustainability, technology and new residential models will be among the factors shaping the sector in the coming years.
At Quinta Avenida, we continue to monitor these trends to help you make informed decisions. If you are looking to sell, buy or rent your home, find out the value of your property or discuss the market with a professional, you can contact us or visit the Quinta Avenida website.
