Property prices in Spain have increased dramatically in the past few years, leading to a severe housing crisis.
This has been fuelled further by a housing deficit, an increase in the number of foreign buyers, and changes in the types of properties people are looking for.
This, combined with a high demand and lack of supply, has meant that prices have kept on rising.
READ ALSO: The overlooked factors causing Spain's housing crisis
Despite the dire situation, real estate activity has been intense throughout 2025, driven by low interest rates and buyer confidence in the real estate market as a good place for investment.
In their new report "The Real Estate Pulse Meter", the Real Estate Business School together with the University of Málaga forecast that home sales, prices and mortgage signings will continue to grow strongly next year.
The study's forecasts a 7.6 percent increase in transactions of newly built properties in Spain in 2026 and an 8.7 percent increase in transactions of existing homes, although the signing of new mortgage contracts will stabilise to +0.4 percent compared to 2025.
According to Spain’s National Statistics Institute, property prices in 2025 have risen 12.8 percent compared to last year, marking 42 consecutive quarterly increases.
READ ALSO: Foreigners buy over 60 percent of Spain's luxury homes
Property in Spain is now 83 percent more expensive than in 2015 and 21 percent more expensive than at the height of the housing bubble (2007-2008).
Idealista property website lists the average price as of November 2025 as €2,605 /m2. This has already grown since October by 2 percent.
According to property website Fotocasa, the consensus among experts is that purchase prices will continue to rise in 2026, although less sharply than seen previously.
The BBVA Research Real Estate Observatory also agrees, saying that the lack of new housing construction will cause property prices to continue to rise in 2026 by around 7 percent.
Héctor Tramullas, CEO of Gilmar real estate agency agrees, estimating that prices will continue a "moderate upward trend, around 4-6 percent”.
Teresa Marzo, CEO of real estate agency Elix also puts the rise at a similar rate. "We estimate that the increase will be more moderate than in previous years, settling at around 5-6 percent annually,” she told Fotocasa.
READ ALSO: Spain's government supports limits on foreign homebuyers in the Canaries
Some experts believe that the rise will be much higher than this, however. Ricardo Martí-Fluxá, business and corporate development director of Gesvalt, predicts a year-on-year variation of around 9 to 10 percent compared to 2025.
Antonio Pérez de la Torre, general manager of Alfa Inmobiliaria told Fotocasa that average price for property in Spain “will exceed €305,000 for new construction and will be around €204,000 for second hand homes”.
Renting in Spain in 2026
Just like with property sale rices, rents in Spain have skyrocketed in the past few years, leading to a severe housing crisis with a deficit of available properties on the market and large groups of the population unable to afford decent housing.
Prices reached record highs in 2025, marking three consecutive years of record increases. According to Fotocasa, there has been a 27 percent rise in just the past five years.
So what's the outlook for 2026, will rents continue to increase at the same rates or will the market finally start to improve?
Experts at Fotocasa believe that main factor that will continue to define the rental market in 2026 are the issues caused by the Housing Law, which has given landlords a lot of legal uncertainty.
New regulations and the withdrawal of properties from the market are the main concerns, causing prices to increase even further.
Some of the laws have been so pro-tenant, that renting out properties becomes a legal minefield for landlords. Many are also too scared to rent long-term, worried about tenants defaulting on payments and continuing to occupy their properties.
Fotocasa’s forecast is that supply will remain limited or even decrease, fuelling even greater price rises.
According to rental platform Wolo, an increase of rental prices between 3 and 5 percent is estimated in urban areas. They expect this will be particularly noticeable in large cities such as Madrid, Barcelona, Valencia, Malaga and Seville.
David de Gea, CEO of HousinGo, told Fotocasa that he believes the rental market "will continue to show similar trends to recent years: accessibility difficulties, competition among tenants and a market clearly favourable to the landlord”.
The Ministry of Social Rights, Consumer Affairs and Agenda 2030 has analysed the variation in the average price per square metre from 2021 to the present day and their conclusion is that rents will rise by up to €383 per month in 2026.
The Balearic Islands is predicted to be the region where rents will rise the most, followed by Valencia and then the Canary Islands.
The Ministry of Consumer Affairs, also warns of further problems in the rental market in 2026, which could explain some of these expected price increase.
A total 632,369 rental contracts were signed in 2021, and the vast majority will expire next year, having reached the legal five-year lease term stipulated by law. This means more than 1.6 million people will be forced to renew their contracts at higher rates or will have to look for new housing in market where supply is already low.
Since those contracts were signed, the average rent for an 80-square-metre apartment has risen from €864 to €1,160, meaning that tenants now have to pay about €300 more per month to rent the same apartment.
There is some good news on the horizon, however, as the government has announced the launch of Casa 47 - the Spanish government's new public housing department, which aims to provide social housing at affordable rental costs, not exceeding 30 percent of the average salary in each region. Access to this, however, will be income based, so it will depend on if you meet the requirements.
Comments