Housing prices will grow by 5% in 2026, but will fall in the following 5 years

The Spanish real estate market may be approaching the end of one of its longest upward cycles in recent decades. Since 2013, prices have risen continuously, but many industry experts now believe this trend could start to ease from 2027 onward. During the recent District 2025 conference in Barcelona, several analysts suggested that 2026 will likely be the last year of noticeable growth—around 5%—before the market enters a correction phase that could last between three and five years.

This forecast is not driven by a drop in demand, but by the natural exhaustion of the cycle and by how key factors evolve, such as international investment, regulatory changes and the market’s ability to absorb new dynamics. Spain has become a preferred destination for investors from the US, Asia and the Middle East—surpassing traditionally stronger markets like France or the UK. This influx of capital has boosted the sector for years, but it could also make it more vulnerable if part of that investment begins to shift elsewhere.

Within this changing landscape, affordable housing has become the central topic of debate. Spain has one of the lowest shares of social housing in the European Union—just 2.5%, compared to the EU average of 9.3%—and both regional and national governments are launching plans to expand it. For investors, this segment is particularly attractive because it combines social need, long-term stability and alignment with ESG criteria, which are increasingly decisive in financing decisions.

However, scaling this market will require solving several major obstacles, including slow urban planning procedures, high construction costs and a tax burden that can account for up to a quarter of a home’s final price. Another challenge is financing itself. Traditional banks remain cautious about funding affordable housing projects, which has accelerated the rise of alternative financing platforms. These currently represent between 15% and 20% of total financing in Spain, but projections suggest they could reach 50% by 2030.

The shift in cycle affects more than just residential real estate. Sectors such as data centers, logistics and new infrastructure are expanding rapidly and could attract billions in investment over the coming years. Spain’s strategic location is a major advantage, though maintaining this growth will require balancing expansion with energy use, water consumption and ESG commitments.

In summary, the sector is preparing for a different stage—not necessarily a worse one, but a more selective and mature one. The focus is no longer solely on how much prices will rise, but on what kind of market we want to build for the long term: more balanced, more sustainable and, above all, more accessible for everyone.