Publications

The real estate market in Spain continues to be affected by a lack of supply. The shortage of labor, lengthy land development processes, and regulatory uncertainty, among other factors, are reducing the sector’s profitability and, therefore, limiting investment. As a result, prices continue to rise sharply.

Construction GDP contracted by 1.1% in the first half of 2025, driven by a 24.6% decline in Civil Works. The mortgage market shrank by 9.2% , affected by a weak labor market and rising housing prices.

Construction happens to be one of the sectors most heavily affected by labor shortages. While higher wages and immigration are helping to bring talent into the sector, structural problems persist that require a solution.

The construction sector continues to face staff shortages, an aging workforce, and low education levels, which hinder its development. However, since 2022, the arrival of foreign workers may be starting to ease the situation. Improving training would help boost productivity.

Economic growth will continue to support the dynamism of the real estate sector in the coming months. The decline in interest rates, the strength of the labor market, and positive net migration will sustain strong demand in 2025, although it is expected to decelerate in 2026 as a result of slower economic growth.

BBVA Research presents its new real estate sector report in two presentations: the first analyzes sales, supply, prices, rentals, and demographics; the second focuses on the structure of construction, financing, and sustainability. It includes sales projections, drivers, and trends through 2026.

The fact that there is not enough affordable housing in Spain right now is not up for debate. However, as last week’s proposals show, not everyone agrees on the solution.