Spain’s housing market in 2026 remains resilient on the demand side, but is increasingly constrained by a lack of new supply. This is the key conclusion of the latest real estate outlook published by BBVA Research. According to the report, housing demand will continue to be supported by employment, wage growth, and migration. However, the market is unable to respond with sufficient volumes of new construction, which will limit transaction activity while maintaining strong upward pressure on prices.

📊 At first glance, the main forecast may seem contradictory. BBVA expects housing transactions in Spain to decline by 1.6% in 2026, while prices are projected to increase by 10.2%. In 2027, sales are expected to recover only slightly, growing by 1.1%, while price growth may slow to 6.8%, though still remaining elevated. This indicates that the market is not facing a shortage of buyers, but rather a shortage of available housing.

💼 According to BBVA, the strength of demand is driven by several fundamental factors:

— a strong labor market;
— rising incomes and wages;
— high levels of migration.

The demographic component is particularly important. The report estimates net migration at around 550,000 people per year, while the formation of new households remains at approximately 200,000 annually.

🏗 On the supply side, the issue is no longer temporary. BBVA forecasts that the number of new building permits will grow at an average rate of 12.5% over the next two years, reaching around 160,000 units annually. However, this is still insufficient to close the gap between supply and demand. According to the bank’s estimates, the cumulative housing shortage in Spain could reach around 800,000 units by 2027. In other words, construction activity is increasing, but still falls short of actual market needs.

🌍 The Spanish market is therefore not driven by speculative demand, but by a structural supply deficit. As long as employment remains strong, incomes support purchasing power, and migration continues to increase the number of households, upward pressure on prices is likely to persist. In simple terms, the issue is not that demand may disappear, but that the market is unable to deliver enough new housing.

⚖️ The report also highlights an important structural constraint. BBVA notes that profitability in Spain’s construction sector remains low by European standards. Return on equity in construction reached 4.1% in 2024, but this is still 12.5 percentage points below the historical average observed in countries such as France and Germany. This suggests that the sector is not operating under conditions that would allow for a rapid and large-scale increase in supply.

🔎 From a practical perspective, this situation typically means one thing: in a supply-constrained market, the key factor is not waiting for lower prices, but access to high-quality and liquid assets. You can explore property opportunities in Spain based on your budget and goals on our website.