According to BBVA Research, housing prices will increase by 7.3% in 2025 and by 5.3% in 2026
19th May 2025
The shortage of supply and pressure from demand will drive housing prices up by 7.3% in 2025 and 5.3% in 2026, following an increase in prices in 2024 with an annual growth rate of 5.8%, according to data from the latest Real Estate Observatory by BBVA Research.
According to the report, all regions in Spain saw housing prices increase in 2024 compared to the previous year, with the largest rises occurring in the Balearic Islands (+9.7%), the Valencian Community (+7.9%), and Madrid (+7.6%). However, in most regions, prices remain below the peaks reached around 2008.
Looking ahead to the coming quarters, BBVA Research forecasts that demand pressure and housing sales growth will persist due to stronger economic growth, a robust labor market, the recovery of foreign economies, upward revisions in demographic projections, and the gradual decline in interest rates.
Following the 11.7% increase in 2024, housing sales are expected to grow by around 9% in 2025, reaching a total volume of 780,000 units. In 2026, growth is expected to be around 5%, surpassing 800,000 homes sold.
On the supply side, several factors will encourage an increase in housing construction in the coming quarters: stronger economic growth, demand pressure due to the limited supply of new housing, and the public administration’s interest in expanding public housing offerings.
However, the level of housing production will remain relatively low due to a shortage of ready-to-build land, a limited supply of labor, and regulatory uncertainty. It is estimated that building permits will grow by more than 14% on average annually over the current two-year period.
In real terms, BBVA Research estimates that housing prices—adjusted for inflation—will increase by 4.2% this year and by 2.9% in 2026.
Meanwhile, rental prices have risen more sharply than property purchase prices in all autonomous communities since 2019.
This trend is also evident in most of the 15 most populated provincial capitals. Only in Seville, and to a lesser extent in Málaga, does the pressure on the sales market seem somewhat more intense, with purchase prices growing more than rental prices.
Housing affordability effort exceeds 29%
The observatory highlights that, by the end of 2024, the effort required to access homeownership stood slightly above 29% of household salary income, with considerable variation between autonomous communities.
The Balearic Islands, the Basque Country, and Madrid were the regions with the highest affordability ratios. In contrast, in Extremadura, Murcia, and Castilla-La Mancha, the effort is below 20%.
Moreover, the cost of renting represents a higher proportion of household income than buying a home (after the initial down payment) in all autonomous communities.
