Analysis of the year and real estate industry predictions for 2026

AS WE ENTER 2026 the Spanish residential property market stands as one of Europe's most prominent and closely watched real estate sagas.

After a remarkable performance in 2025, marked by rising prices and transaction volumes reaching levels not seen since before the 2008 Global Financial Crisis, the year ahead looks set to maintain this robust trajectory.

In our previous article, we shared last year's performance figures and what we experienced here in Orihuela Costa: real transaction data, real buyer behaviour, and rock-steady pricing.

So what's in store for the Spanish property market during the forthcoming year, what demand is expected in 2026, and how will house prices evolve in Orihuela Costa and the greater Costa Blanca region?

Costa Blanca property prices expected to rise

According to the latest official data published by the INE (Instituto Nacional de Estadística), house prices rose 12.8% nationwide last year, with properties in the Valencian Community experiencing a year-on-year price increase of 13.2%.

These house price increases exceeded industry estimates for 2025 by a considerable margin, with most real estate industry analysts predicting price rises of 5% to 8% at the beginning of the year.

Indeed, CaixaBank Research forecast a nominal house price increase of just 4.0% for 2025, citing affordability as a limiting factor for both housing demand and property prices.

Predictions for the Spanish property market in 2026 appear more optimistic this time around, with Bankinter forecasting that house prices will increase by 7.0% during 2026.

One of the strongest housing markets in Europe

Fitch Ratings forecasts Spain as one of Europe's strongest housing markets in 2026, with 8% to 10% price growth nationwide, largely driven by persistent property supply shortages and sluggish delivery of new homes.

The company upgraded Spain's sovereign rating to 'A' (with a Stable Outlook) in September of last year, due to its sustained strong economic performance, which outpaced other Eurozone economies.

The global financial agency predicts that house prices will rise more in Spain than in Germany, Italy, France, or the United Kingdom, with price growth expected to reach levels seen in the Netherlands by the end of 2027.

For buyers and investors, that typically means that waiting for a "big drop" in house prices won't be a successful acquisition strategy, especially in coastal lifestyle markets such as the Costa Blanca or Orihuela Costa.

Continued demand for Spanish properties in 2026

Throughout the Iberian Peninsula, the defining narrative entering 2026 remains the stark imbalance between demand and supply.

At the end of last year, experts cited by specialist property portal, Idealista, observed continued reductions in listed housing stock, even as domestic population growth and household formation trends intensified pressure on resale housing.

Additionally, a shortage of licenced building land is expected to persist into the year, limiting the impact of administrative stimulation measures, and leaving the country with a national housing deficit.

Demand is expected to remain strong throughout 2026, supported by the area's perennial attractions: an excellent climate, international buyer interest (especially from the United Kingdom, Northern Europe and Benelux countries), and enduring demand for both holiday homes and permanent residences.

The factors shaping the national property market

Demand: Spain remains a hotspot for foreign investors, particularly from the UK, Germany, and other cooler climes in northern Europe. Spain's evergreen appeal as a holiday home destination will continue to attract international buyers during the forthcoming year.

Accessibility: The Costa Blanca and Orihuela Costa are established destinations for international buyers. Excellent flight connections from regional airports to Alicante and Murcia airports, combined with a modest travel time, mean properties in these areas will continue to sell well.

Faltering supply: Property developers continue to face challenges, such as a lack of available building land, and a constrictive administrative burden at all levels of government that impedes the delivery of new homes, and places upward pressure on resale property prices.

Affordability: As property prices rise nationwide, buyers might abandon more expensive mainland areas of Spain, such as Costa Blanca North or Andalusia, in favour of Costa Blanca South and Orihuela Costa, where properties offer better value.

Practical guidance for buyers and sellers in 2026

For sellers: how to make a successful sale:

• Present for an international audience. Clean marketing, accurate documentation, and strong online visibility (where most searches begin).
• Price realistically for condition and location. Buyers will pay for quality, but they are more analytical than ever.
• Prepare in advance. Legal complications hinder sales, and buyers will be more cautious with paperwork.

For buyers: how to secure your property in Spain:

• Assume firm pricing in the best areas and be realistic about house prices. Scarcity of good properties is the underlying reality.
• Prioritise legal clarity, community rules, and rental compliance (if rentals matter to you).
• Focus on important factors. Location, layout, outdoor space, parking, and proximity to amenities are essential.

Predictions for the Spanish property market in 2026

While forecasts can never account for every variable, the overriding theme for 2026 is clear: Spain's property market offers growth that is sustainable and underpinned by structural demand rather than short-term momentum.

The Spanish property market in 2026 offers a mix of opportunities. Strong but stable price growth, an enduring desire for coastal locations, and robust demand are expected to shape the Spanish real estate market over the forthcoming year.

For both homebuyers and investors, this means stability and opportunity, especially in Orihuela Costa and the Costa Blanca, where lifestyle, affordability, and international appeal continue to intersect.

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