Against a backdrop of several consecutive years of sharp increases in house prices and rents, Spain is facing a severe housing crisis. According to data from Spain’s National Institute of Statistics, house prices rose by 12.8% year-on-year in 2025, marking the 42nd consecutive quarter of increases. Entering 2026, the market is expected to remain active, supported by low interest rates and investor confidence, but growth dynamics are showing new characteristics.
House Price Forecast: Widespread Increases, Divergent Growth Rates
Market experts universally agree that the upward trend in house prices will continue into 2026, although the pace of growth will moderate compared to previous years. Different institutions have provided specific forecast ranges:
- The BBVA Real Estate Research Observatory indicates that due to a shortage of new housing supply, house prices are expected to rise by approximately 7% in 2026.
- The forecasts from Gilmar and Elix are more moderate, predicting increases of between 4% to 6% and 5% to 6%, respectively.
- Gesvalt’s forecast is more optimistic, suggesting that the growth rate could reach 9% to 10%.
Overall, by 2026, Spanish house prices will be 83% higher than in 2015, even surpassing the peak of the 2007-2008 real estate bubble by 21%. Alfa Inmobiliaria predicts that the average price of new homes will exceed €305,000 per unit, while second-hand homes will be around €204,000 per unit.
Rental Market: Regulatory Impact and Supply Shortage
The situation in the rental market is equally challenging. Over the past five years, the average rent in Spain has risen by 27%, hitting a new historical high in 2025. Looking ahead to 2026, one of the core drivers of rent increases is the new housing law.
This law, by providing more legal protection to tenants (for example, by increasing the difficulty of evicting illegal occupants), has led many landlords to become hesitant about long-term rentals, fearing the risk of tenant defaults. Experts at Fotocasa analyze that this could lead to a further reduction in the already tight supply of available rental properties, thereby pushing up rental prices.
The rental platform Wolo predicts that rents in major cities like Madrid and Barcelona will increase by 3% to 5%. An analysis by Spain’s Ministry of Consumer Affairs shows that for an 80-square-meter residence, the average monthly rent could rise by about €383 in 2026, with particularly significant increases in the Balearic Islands, Valencia, and the Canary Islands.
Key Market Variables: A Wave of Lease Renewals and Cost Pressures
A key socioeconomic factor is that a large number of five-year rental contracts signed in 2021 (totaling approximately 632,369) are set to expire in 2026. This means that over 1.6 million tenants will face a choice: either accept a significantly higher renewal price or re-enter a tight market to find new housing.
Data shows that since 2021, the average monthly rent for an 80-square-meter apartment has risen from €864 to €1,160, significantly increasing tenants’ living costs. This wave of lease renewals will undoubtedly place greater pressure on the rental market in 2026.
