The Residential Market in 2026: Increasingly Demanding and Segmented

The Spanish residential market enters 2026 with strong and growing demand against a supply that still does not fully meet the country’s real housing needs. The creation of new households, largely driven by immigration, is progressing at a pace higher than the production of new housing, which remains around 100,000 units annually. This structural imbalance explains many of the current tensions and signals their continuation in the short and medium term.

2025: Rapid Absorption and Rising Prices

The 2025 market review confirms a highly dynamic environment, especially in the new-build segment. The limited availability of properties led to a rapid absorption of supply, even in high-priced areas, making it difficult to moderate growth. Unable to satisfy all demand with new developments, many buyers turned to the secondary market, pushing prices higher in that segment as well.

However, these trends did not resolve the underlying structural imbalances: supply remains insufficient, price pressures persist, and access to housing continues to be limited for large segments of the population.

Sales and Prices in 2026

Projections for 2026 indicate a continuation of these dynamics. The volume of sales is expected to increase by around 5%, supported by demand that continues to exceed the market’s capacity. Prices are anticipated to rise across the board: approximately 10% for new-build housing and around 8% for resale properties. While growth is moderating compared to recent peaks, the overall trend remains upward.

In the rental market, tensions are expected to be even more pronounced. The combination of growing demand and limited supply due to regulatory uncertainty could drive increases of up to 12%. This trend is prompting some tenants to reconsider purchasing as an alternative, while others opt for partial solutions such as renting individual rooms.

A Two-Speed Market

Regional segmentation is increasingly evident. Major metropolitan areas continue to bear the greatest pressure, driven by their economic and employment appeal and limited land availability. Madrid and Barcelona remain national and international magnets, with prices expected to grow above the national average.

Alongside these urban hubs, the most desirable coastal areas maintain strong appeal: the Mediterranean coast, Andalusia, and the archipelagos are particularly attractive in the mid-range, luxury, and ultra-luxury markets. High-net-worth international buyers are drawn to Spain for its climate, safety, healthcare, and quality of life, directly influencing average prices in these locations.

In contrast, many inland areas are experiencing population decline and limited real estate activity, with stagnant or even declining prices. These markets are largely disconnected from the dynamic urban and coastal trends.

New Approaches to Supply Shortages

With traditional development unable to meet demand, alternative housing solutions are gaining traction. Living models such as flex living, coliving, and hybrid formulas are consolidating as practical responses, offering flexibility, optimized use of space, and shorter time-to-market.

Conversions of property use are also becoming an effective strategy to introduce housing in established locations. The transformation of underused office buildings and tertiary assets into residential properties, though complex, is accelerating due to social pressure and greater administrative support, especially when aimed at affordable housing.

Risk of a Bubble?

Despite rising prices, there are no indicators of a sharp market correction. There is neither an oversupply nor uncontrolled debt, and the conditions that caused the previous housing bubble are not present. The reality today is a strong, structurally higher demand than supply, reinforced by demographic growth, foreign interest, and a still-favorable financing environment.

A Persistent Structural Challenge

All signs point to 2026 being another year of tension in the most sought-after markets. Until structural factors are addressed —including effective supply increases, streamlined urban planning, and rental incentives— access to housing will remain one of Spain’s major economic and social challenges.

At Bel Air Properties, we guide our clients through this dynamic landscape, providing strategic advice and access to properties that combine prime location, design, and functionality, aligned with residential market trends and the expectations of premium investors in Spain.