Spanish property prices continue their upward trend

Raymundo Larraín Nesbitt, June, 19. 2026

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By Raymundo Larraín Nesbitt
Lawyer – Abogado
19^th of June 2026

Introduction

Last July 2025, we published this article: Property prices in Spain reached all-time highs. Can they continue to rise?

We got a lot of flak because in it we claimed we were in a new property bubble. The main criticism was that there was no property bubble this time because there was no greed-driven credit bubble, and demand - both domestic and foreign - remains strong. These two points are, of course, true.

Sure, the causes may be completely different from the 2008 bubble (a supply crunch), granted, but the end result is exactly the same: a sharp increase in property prices in a short space of time across the board. Call it what you want (semantics), but if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.

Real examples speak louder than words:

Property bought in 2021 in Estepona for 200,000, sold now in 2026 for 420,000
Property bought in 2017 in Malaga for 450,000, sold now for 950,000
Property bought in 2014 in Madrid for 165,000, sold now for 400,000
Property bought in 2017 in Madrid for 350,000, sold now for 850,000

In the above-linked article, we explained in detail the underlying reasons why property prices were so high and why we thought the trend would continue unabated over the next few years.

Here we are one year on, and property prices have increased by two digits nationwide!

Moreover, particularly concerning is the news that resale property has broken a historic record, with an annual increase of 13.5% over the last year. This is stunning. It can be explained because there is a severe shortage of off-plan property, which pushed sale prices to new records, prompting buyers to opt for resale instead, again pushing up resale prices in a contagion.

But the Bank of Spain sees no property bubble and is even of the opinion that property prices are still 18% undervalued (?). It should be noted that the previous Chairman, who responsibly warned about the real estate market overheating, was quickly replaced in November 2024 by the government with an ex-government minister, who has proven to be more complacent with the government’s narrative.

All this against a backdrop of Spanish wages barely increasing 5% in real terms over the last 30 years, whilst house prices have increased by 300%.

Spain has a serious housing problem, and all Spanish Authorities are burying their heads in the sand, pretending nothing is happening.

The government approved a batch of laws to counter the increase in prices, and all of them have fallen flat on their face or even backfired spectacularly (Spain’s Supreme Court eliminates the new Rental Tourism Registry), adding more confusion and red tape. None of them worked and has in fact further compounded and aggravated the problem.

You would think, in view of the growing housing problem, that it would be an all-hands-on-deck situation. Well, you’d be wrong.

The government approved last month a new law that will regularise over 900,000 illegal immigrants. To which you need to add in a minimum of a further million when they apply to regroup their families that live abroad. In truth, knowing how these immigrants typically have 4 or 5 family members, we could be speaking of an extra 4 or 5 million people.

Spain already faces a huge housing deficit of about 1,000,000 housing units, and on top of it, the government is now going out of its way, and then some more, to add fuel to a dumpster fire by bringing in an extra one or two million people in a short space of time.

The population of Spain in 2016 was 46 million, and by the end of 2026, we will have 50 million with this new regularisation procedure underway. That's almost a 10% population increase in under a decade, bonkers.

Spain is the country that builds fewer homes in all of the European Union. Clearly, what’s needed, besides lowering taxes, is to build more homes. Currently, Spain builds under 90,000 units a year, when realistically it should be building over 300,000 units a year. Spanish Authorities refuse point-blank to increase the number of built homes for ideological reasons, and the housing problem is only getting worse with each passing year.

It’s truly shocking, but the increase in interest rates by the ECB may actually provide a welcome respite to the Spanish real estate market by cooling it off.

The fact is that a progressive government, following its political agenda of lofty ideals, has approved and implemented a series of well-meaning laws that have proven counterproductive, and as a result, have catapulted property prices through the roof!

In plain English, paradoxically, a left-wing government has enabled and paved the way for property owners (and landlords) to become rich faster than any phoney get-rich scheme! Property prices in Spain will continue to rise unchecked until the matter is addressed decisively by this or another government.

Ironically, there is no faster way to get rich than to buy real estate in Spain.

The road to hell is paved with good intentions.

At Larrain Nesbitt Abogados (LNA) we have over 23 years of experience specialising in property conveyance and taxation. We also assist clients with immigration & residency visas (digital nomad visa), and inheritance procedures (probate). You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.

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