BBVA Research is clear: housing prices will continue to rise. According to its latest report on the real estate market, in the coming months we will see fewer sales, more new construction, and, yes, even higher prices.
The bank's research team expects housing demand to remain strong. Why? Because there are more jobs, wages are rising, interest rates remain quite low, and more and more households are being formed, both among the Spanish population and immigrants. Furthermore, foreigners continue to buy second homes.
On the supply side, they also expect improvements. They say that new housing construction will grow by 10% in 2025 and 12% in 2026. But they warn: this pace is not enough to meet all the accumulated demand since 2021. Between 2021 and 2025, only enough housing will have been built for 45% of new households. In the last 12 months alone, the housing deficit has reached 134,000 units. If this trend continues, the gap will persist for a long time.
For all these reasons, the market will remain unbalanced and prices will continue to rise. According to BBVA, housing prices will increase by an average of 10% this year, and another 7% next year.
Regarding sales, BBVA Research expects them to slow down. Official figures already reflect this: in August, notaries registered 38,239 transactions throughout Spain, 1.3% fewer than the previous year. This is the lowest figure in two years, the second consecutive decline, and the third in the last four months.
Home sales have been slowing since February. The reason? There is a shortage of both new and existing homes, and prices continue to rise. All of this is pricing some buyers out of the market.
BBVA Research warns: if there isn't more supply at reasonable prices, sales won't grow much further, even if demand remains strong. They estimate that sales will rise by only 1.8% in 2025 and will stagnate in 2026, with a slight drop of 0.3%.
So why is it so expensive to build new homes? The report highlights eight main problems:
1. Regulatory uncertainty. BBVA calls for changes to the legal reforms most detrimental to the rental market and for faster legal proceedings in cases of non-payment. They criticize the Housing Law and demand that evictions of squatters be expedited.
2. Lack of developable land. In Spain, the equivalent of 26% of the current housing stock remains to be built. BBVA believes the procedures for developing land must be accelerated.
3. Low public budget. Public funding for housing remains low. Although the new 2026-2030 Housing Plan represents an improvement, it is still insufficient.
4. Labor shortage. The construction industry is struggling to find workers. Between 2016 and 2024, the number of vacancies quadrupled. This raises labor costs and reduces developers' profit margins. The sector needs generational renewal and more immigration, training, and process industrialization.
5. Low productivity. In addition to the labor shortage and high costs, the sector's productivity is 25% below the national average.
6. More expensive materials. Construction materials have become much more expensive since the pandemic. Thirty-three materials have risen more than the CPI.
7. Tourist accommodation. The increase in tourist apartments reduces the supply of homes available for rent as permanent residences.
