The Big Picture

After several years of rapid price growth, the Spanish property market is entering a more balanced phase in 2026. According to the latest data from the Instituto Nacional de Estadística (INE), average property prices rose by approximately 3.2% year-on-year in Q1 2026 — a marked slowdown from the 8-10% annual gains seen in 2022 and 2023.

This is good news for buyers. The market is cooling, not crashing.

Key Trends Shaping 2026

1. Mortgage Rates Are Easing

Euribor — the benchmark rate for most Spanish mortgages — has fallen from its 2023 peak of around 4% to approximately 2.5% in early 2026. Banks are once again offering competitive variable and fixed-rate products, with non-resident mortgages available at up to 70% LTV.

2. New-Build Supply Is Rising

After years of underbuilding, developers are responding to demand. An estimated 120,000 new homes are expected to complete across Spain in 2026, with the largest concentrations in Madrid, Málaga, Alicante, and Valencia.

3. Coastal Markets Remain Strong

The Costa Blanca and Costa del Sol continue to attract international buyers. Alicante province saw the highest number of foreign property purchases in Spain in 2025, with British, Belgian, and Scandinavian buyers leading the way.

Where Are Prices Headed?

We expect moderate growth of 2-4% nationally in 2026, with stronger performance in coastal and major-city markets. Overheated micro-markets may see slight corrections, but a broad crash is unlikely given continued demand and limited supply in prime areas.

What This Means for Buyers

• Don't rush, but don't wait indefinitely. The market is favouring buyers more than it has in years.
• Get pre-approved. With rates easing, a mortgage pre-approval gives you negotiating power.
• Consider new builds. New developments often offer better value, energy efficiency, and VAT (IVA) at 10% instead of ITP transfer tax.
• Negotiate. In a stabilising market, sellers are more open to offers.

Summary

2026 is shaping up to be one of the best windows for buying property in Spain in recent years. Prices are reasonable, financing is accessible, and supply is improving. Do your homework, work with a trusted local agent, and take advantage of the current balance between buyer and seller power.