“For decades, Marbella has stood as the Costa del Sol’s benchmark for luxury real estate and international prestige, while Estepona was known for its traditional Andalusian character and more modest residential and tourism profile.

Over the past ten years, however, that balance has begun to change. Estepona has evolved from a quieter alternative into one of the region’s most dynamic growth centres, with rising sales volumes, increased development activity and growing market visibility.

The question is no longer whether Estepona is emerging, but how significant this shift really is — and what it means for the future of both municipalities within the Golden Triangle.”

Our latest market report examines how and why this relationship has evolved, and whether Estepona is truly closing the gap.

The Key Findings

The data tells a clear story.

Between 2015 and 2025, property sales in Marbella grew by 19%. In Estepona, they grew by 50%.

Marbella remains larger in absolute volume and continues to command higher average prices per square metre. However, Estepona’s rate of growth has been significantly stronger.

Price evolution shows a similar pattern. Since the pandemic, price increases in both towns have moved broadly in parallel. The historic gap has narrowed.

Tourism figures also reveal a notable shift. Estepona has expanded its share of hotel stays within the Golden Triangle, reflecting its growing appeal as a lifestyle destination.

The conclusion is not that Marbella has weakened — but that Estepona has strengthened.

What Is Driving Estepona’s Momentum?

Several structural factors explain this acceleration.

Estepona has benefited from a more agile planning process, which has attracted a substantial volume of new development. It has also had greater availability of buildable land in recent years, allowing projects to move forward more easily.

At the same time, the town has invested heavily in infrastructure, public spaces and amenities. The pedestrianised Old Town, upgraded marina, new cultural facilities and healthcare improvements have all contributed to a repositioning of the municipality.

Importantly, Estepona still offers more property for the same budget when compared to prime Marbella. That relative value — combined with improving quality — has strengthened its appeal to investors and long-term residents alike.

Where Marbella Still Leads

Marbella remains the benchmark for ultra-prime property.

The Golden Mile, Sierra Blanca and Nueva Andalucía continue to command the highest values and hold the strongest international brand recognition. Limited supply in these areas supports exclusivity.

In other words, Marbella’s position at the top of the hierarchy remains intact.

What has changed is the distance between the two.

Convergence, Not Competition

The report suggests that what we are witnessing is not a replacement, but a convergence.

Estepona has transitioned from emerging alternative to structural growth engine. Marbella continues to represent scarcity-driven prestige.

Together, they form two complementary pillars of the Golden Triangle — one defined by established luxury, the other by upward momentum.

For investors, developers and international buyers, understanding this balance will be essential over the coming decade.

Read the Full 2026 Market Report

This article provides an overview of our latest findings.

For full transaction data, price evolution tables, tourism analysis and long-term projections, you can access the complete report here:

→ Read the full Estepona vs Marbella Market Report here.

The Digital Nomad Visa (DNV) has become incredibly popular in Spain, with the numbers tripling between 2023-2024 years to almost 30,000. A significant proportion of those staying in Spain are also choosing the Costa del Sol, with Malaga ranked third in the world for digital nomad destinations (Spain overall is ranked number one).

The reasons are obvious why Malaga province is so attractive. Of course the 300+ days of sunshine, the natural beauty, and the lifestyle are famous worldwide. In addition, Malaga province has world class digital infrastructure, transportation infrastructure, healthcare services, international schools, and more.

Andalusia also has excellent tax benefits for the highly paid professionals that typically make up the population of DNV holders. There are the Spanish national tax rules through the DNV program, which provide low income taxes and no taxation of foreign assets. In addition, in Andalusia there are regional tax benefits, such as no inheritance tax and ultra low gift taxes.

Meanwhile, the regional and local governments – as well as private sector contractors – continue to build or expand regional infrastructure, increasing the region’s attractiveness.

The Malaga airport, for instance, already the fourth airport in Spain by destinations served, is scheduled for a €1.5 billion expansion. This will double capacity and increase the number of destinations to more than 200.

Additionally, there are plans – too slow moving it is true – to build out a rail line through the Costa del Sol. And plans are finally moving forward to improve traffic problems on the A7 highway along the coast.

Beyond general improvements that make the region more attractive, there has also been a specific outreach to digital nomads, drawing them to Malaga province. In August, 2025, the city of Malaga received a certification from AENOR (a Spanish national standards certification organization) as a digital nomad destination. It is the first city in Spain to receive this certification.

The result of all this has been a growth in digital nomad numbers, including a claimed 40% increase in demand for housing for DNV recipients on the Costa del Sol.

Why does this matter?

The dramatic growth in the number of digital nomads in Malaga province is important for a number of reasons both direct and indirect. It’s also an important indicator of the health of the region economically – in terms of jobs and foreign investment.

Directly speaking, the arrival of digital nomads in the Costa del Sol, helps support the long term rental housing market. That is particularly true of higher end housing that caters to the lifestyles of digital nomads, who must have a minimum of €4,516 of monthly income for a family of four.

For comparison, the average net household income in Spain for a family with children is €3,722. In Andalusia it is lower.

All the talk regarding housing has been about vacation rentals and the growing wave of regulation and restriction. But the influx of foreigners and even Spaniards from the north, has quietly made the long term rental market lucrative on the Costa del Sol.

In Estepona the rental yield is 5.85% overall but in the luxury sector they are substantially more, with rental yields in the luxurious Golden Mile area fetching between 8%-12%.

Digital nomads are also not all simply in Spain for a sabbatical year. Many are trying out the Spanish lifestyle to see how it fits their family. Ultimately, many stay behind to raise families, acquire long-term residency – and to buy houses. Inevitably, they will tend to buy in the areas where they settled and have rented.

Some studies suggest that digital nomads make up 25% of luxury home purchases in the Costa del Sol. If true, that is a significant floor under the luxury housing market in the region, contributing to price growth and economic development, especially in the construction sector.

But there are other direct effects of the DNV program. The high family income requirements mean that digital nomads tend to take advantage of more services, from gymnasiums and personal trainers to restaurants.

Digital nomads are also the impetus behind the explosive growth of coworking spaces in Malaga. Spain overall has 1,036 co-working spaces serving 105,000 tenants. Forty-seven of those co-working spaces are in Malaga province and they have an occupancy rate of 92%.

A Sign Of Good Things

It is undoubtable that digital nomads are contributing to the growth and wealth of the Costa del Sol. This is having both direct impacts and indirect impacts.

But there are two other factors that we have to consider as well. For one, their arrival and visible contribution to the culture and economy encourages investment. They represent untapped demand and potential profit, jobs and more.

That investment comes in multiple forms, including infrastructure investment as the government seeks to encourage more visitors and residents.

It is also represented in both foreign direct investment and in the construction of new homes, new hotels, malls, and other private infrastructure. Andalusia, for instance, has seen a dramatic growth in FDI over the last decade, twice as much by percentage as Spain overall. According to Sur in English:

According to the analysis, the region generated 837 million euros in foreign direct investment, which is the second best figure of the last decade, representing a growth of 41% compared to 2023 (595 million). The comparison on a national level is also striking, given that the average growth in Spain was 19%.

Even more dramatic in terms of raw numbers are the investments in luxury housing projects that we see in the “golden triangle” of Marbella, Estepona, and Benehavís. At the end of 2024 there was an estimated €3.2 billion earmarked for luxury developments. This represents a greater than 20% increase.

And although the growth in investment in hotels slowed in 2024, it nonetheless counted for €269 million.

Of course, this isn’t all the result of digital nomads. There are a number of factors that are causing the current surge. But the growth of the digital nomad population feeds into a virtuous circle of growth, global awareness, popularity, infrastructure and business investment.

And many of these digital nomads become the best ambassadors to promote the Costa del Sol globally. Around 60% of digital nomads in Spain are not from EU countries, and 33% come from the Americas. They represent not only an enrichment of the local culture but also an opportunity for the region to continue its forward momentum and economic vibrancy.

Marbella’s real estate market continues to go gangbusters as it becomes an ever-more powerful magnet for those seeking luxury and high quality lifestyles.

Marbella just shattered every luxury real estate record in the book. While most markets struggle, the Costa del Sol’s crown jewel keeps shining.

The numbers are staggering. Official data from property appraisal company Tinsa shows Costa del Sol coastal properties rose 14.3% in 2024. The average price reached €2,612 per square metre. That’s double the national average.

Marbella commands even higher premiums. Between Marbella and Manilva, holiday homes average €4,100 per square metre. Prime locations fetch substantially more. Some beachfront properties exceed €30,000 per square metre.

The Golden Triangle recorded remarkable growth. According to the DOM3 business association, some 8,708 property sales across Marbella, Estepona and Benahavís in 2024. This represents a growth rate of 5.64%, which is 50% higher than the growth of the Spanish economy. It also represents a 20% higher sales volume than prior to Covid.

Foreign buyers dominate the luxury segment. According to the National Association of Property Registrars, foreigners make up 32.5% of home buyers in Malaga province. That number is higher in Marbella. When we look at luxury property, the percentage of foreign buyers of luxury property reaches an astonishing 90%, according to property portal Idealista.

Of these luxury purchases – homes higher than €2 million – fewer than 10% require mortgages. Bank of Spain data shows most purchases are cash transactions. That suggests that this is not highly leveraged speculation money – as was the case in the lead up to the banking crisis in 2007. This is “I want this lifestyle” money.

Why Marbella? Why Now?

While other luxury markets cool down, Marbella stays on the boil. In 2023, for instance, prices in Marbella grew by 13.7%. The reason is simple; the city offers something money can’t buy elsewhere. Year-round Mediterranean weather and lifestyle along with world-class infrastructure.

World-class golf courses dot the landscape. Over 70 championship courses stretch from Málaga to Sotogrande. Michelin-starred restaurants serve exceptional cuisine. Puerto Banús ranks among Europe’s most exclusive marinas.

There’s also a strong feeling of being in a region with healthy growth and improvement since the end of Covid. According to CaixaBank Research, Andalusia’s GDP grew 3.2% in 2024. This economic strength underpins property market stability.

The strong growth also suggests that Marbella has “gone viral.” Word has spread to Europe and beyond about the offerings of the city and region. Buyers are drawn here in growing numbers, boosting demand.

The Foreign Buyer Phenomenon

As noted above with the remarkable statistics on foreign luxury purchases, international buyers are flocking to Marbella in big numbers. Americans, who turned away from Marbella in the 1990s, now represent the fastest-growing segment and were third in terms of visitor numbers in 2024.

Because of this growing popularity, there are now daily, direct flights between Málaga and New York for five months of the year. This connectivity transforms accessibility.

American buyers discover value impossible to find in the USA. A luxury property in the La Zagaleta country club estate, the most expensive property in Benahavís, is €6,580 per square metre. In San Jose, California the price is €7,800 for a luxury home.

While Americans are a growing segment of the market, buyers come from a total of 153 different countries, representing 78.6% of the population of the world. This diversity helps to insulate Marbella from single-market dependence, though Britain continues to be the largest source of buyers at 15%.

This speaks to the virtuous circle that exists on the Costa del Sol of strong tourism that leads ultimately to home purchases. It is true that this summer the number of tourists has declined. However, that is quite possibly from an unsustainable record high last year that saw 14.4 million come to the region.

It has, in any case, had no effect on sales or prices in Marbella or the Costa del Sol more broadly.

Looking Ahead to 2026

Market fundamentals remain strong for continued growth. Not only is Spain’s economy continuing to grow better than any other large economy in the EU. There’s also an imbalance in the overall housing market that will take another year or two to work out, at least.

That is, there’s not enough houses being built to meet the demands of Spain’s growing population and vibrant vacation property market. That means that price growth will remain strong.

That’s good news and bad news, depending on whether you’re looking to sell or buy. However, there is a growth in construction of new homes, which is closing the housing deficit quickly. By next year, there could be enough houses built to meet new demand and then begin to be enough houses built to reduce the “housing debt”.

For Marbella, this continues to bode well for a strong real estate market. Not only are there already strong fundamentals, but the city finally passed a new planning law in June 2025, after almost 3 decades of fiascos and uncertainty.

Eliminating that roadblock is opening up a number of big projects, including affordable housing and infrastructure improvements. By the end of 2025, there is an expected construction investment total of €800 million.

Marbella’s ongoing real estate boom reflects fundamental value and the effect of its global reputation as a destiny of quality. The combination of climate, culture, and connectivity proves irresistible. The numbers tell the story. Marbella’s trajectory points skyward.

Holiday rental licenses transfer with the property

At the end of August 2025, after a long process of appeals, the General-Directorate for Legal Security and Public Faith ruled that the sale of a property does not negate the short term rental (STR) license.

That means that if you want to buy or sell a property and it earns income from Airbnb or another similar platform, its license will transmit. That provides value stability to properties and is a huge sigh of relief for tens of thousands of property owners.

Previously the rule, as enforced by the land registry, had been that the license was no longer valid as it was assigned to a legal person, not the property.

However, lawyers for a complainant in Malaga argued that the license was not awarded based upon the qualifications or qualities of the applicant. It is awarded based upon those of the property, meaning it is the property and not the person who is licensed.

In other words, unless the conditions of the property have changed, such that it places the property outside of the requirements of the law, the license remains valid. That also means that even if a community of owners in a building or an urbanization vote to prohibit STR, they cannot take away the licenses of those already registered.

Jacob Salama, writing in a post on LinkedIn, noted that this was a major victory for the following reasons:

“Because it ensures the continuity of the right to operate tourist housing, protects real estate investment and reinforces the legal certainty of owners. With this doctrine, simple administrative delay is prevented from preventing legal tourist rental and the true nature of the license is recognized: an attribute of the property that increases its value and stability.”

That means that a new owner can continue with STR activity and is only required to inform the ministry of the change of ownership. But this is informational and cannot be used to hinder rental activity, all other things being equal. The new owners must also abide by any previous agreements with the community of owners from the previous owners.

While this is the current legal status, it is possible that the land registry could appeal to civil court, but given the weight of case law, including Supreme Court decisions going back decades, this seems unlikely.

This is excellent news for investors and owners of vacation homes.

Spain’s economy is on fire. The numbers don’t lie. GDP growth hit 3.2% in 2024, making Spain Europe’s fastest-growing major economy. According to the Spanish government, the country posted 50% of the entire EU’s economic growth last year.

This is all, of course, great news as I wrote back at the end of 2024.

But there’s a catch that suggests we should be sober and not drink too much champagne. Elements of Spain’s current boom are the result of factors that are going to end or are precarious in nature.

Instead of resting on laurels, now is the time to consolidate momentum and lay the foundations for future growth – and I’m not entirely sure that the Spanish government is able or willing to do that.

Let’s start from the fact that the current boom rests on three pillars and their contradictions.

First is tourism. Tourism continues to bring record crowds and enormous amounts of economic growth and foreign currency. But, as we’ve seen with the demonstrations that have filled Spanish streets over the past two years, it also comes with controversy – from over-tourism to blame for the housing crisis.

The second pillar of the current growth wave is the result of EU recovery funds – but deadlines loom. The €80 billion that Spain received post-Covid must be spent by 2026. That will have a negative effect on growth.

Thirdly, and lastly, immigration has played an important role in fuelling growth in both the labour market and consumer spending. But, just as tourism and Airbnb have sparked controversy on the left, immigration is spurring the right. The anti-immigrant Vox party is growing in support, largely on the basis of this.

The Tourism Goldmine That’s Pricing Out Locals

Tourism drives Spain’s growth, outpacing the economy as a whole since prior to the Covid pandemic. In 2024, the tourism sector generated €249 billion in 2024, reaching 12.9% of GDP, according to a research paper by Caixa Bank. By 2026, they predict that tourism will reach 13.3% of GDP.

This is the result of a growth in both absolute numbers of visitors and also the amount of money being spent by each tourist. The result has been that tourism not only brings in money, it also creates jobs. The World Travel & Tourism Council estimates that tourism accounts for more than 14% of all jobs in Spain.

That has spillover effects in a number of areas, creating growth multipliers in a variety of industries. For instance, in real estate, in Malaga province fully one-third of property buyers were foreign born in 2023. For Alicante, that number was 43%. That will likely have grown slightly since 2023 as the number of foreign buyers in Spain as a whole has grown by 1.8%.

Most of that growth is concentrated in coastal and touristic regions in Spain. The pattern is well-known in the real estate industry: foreigners come to Spain for vacation, fall in love with the climate, the landscape, the food and the lifestyle. After a few trips, many will buy a property.

But that success comes at a price. Not only is tourism concentrated in particular areas of the country. It is also often concentrated in particular areas within cities. Without regulation and infrastructure investment, this easily leads to the most attractive areas of a city – such as Barcelona’s old town – becoming populated only by tourists, with locals priced out of the market.

That has contributed to rising protests and anger at “over-tourism.” And it creates a visible target for anger at other issues that are only partially related, such as the housing crisis. The result, if there isn’t proactive planning – rather than short-term political posturing – is that we kill the goose that laid the golden egg.

EU Recovery Funds: An opportunity that could be lost

Controversial or not, it seems certain that tourism will continue to play a central role in the Spanish economy for years to come. The country will continue to be beautiful, the climate spectacular and the beaches irresistible.

However, the growth will reach its limit. You can only fit so many tourists into the country and there’s only so many tourists within convenient travel distance, though who knows where those limits are?

In the meantime, a bigger question is related to a large infusion of EU Next Generation funds to Spain. The numbers involved are very large with €80 billion in grants and another €83 billion in loans, for a total of €163 billion. Santander Bank reported that by the end of 2024 Spain had executed about 70% of the grants, or €56.3 billion.

Some of this is invisible to ordinary people but a lot can be seen in infrastructure improvements. Roadwork and repair in cities across the country. Improvements and expansion to Spain’s impressive high speed rail lines. The sudden appearance of electric vehicle charging stations in parking lots and shopping malls. There are also fibre optic internet installations in smaller communities and money for digital transformation in Spanish businesses, large and small.

In spring of 2024, Caixa Bank estimated that the contribution to the Spanish GDP by these public investments would account for almost half a percentage point of growth.

However, not only is this boost to the economy coming to an end in 2026, there is concern that even what Spain has received has been poorly accounted for and had problems with corruption. The fear is that the opportunity to bring Spain fully into the 20th century and prepare it for the future will have passed.

Part of that is the result of PSOE government incompetence and corruption and they should accept the blame for that. But the lion’s share comes from the paralysis of Spanish political culture.

Sanchez has no majority in parliament and the smaller parties – and the PP – are more interested in jockeying for the next election or for sector interests, even at the expense of their constituents. The government hasn’t even been able to pass a budget since 2023.

Immigration: Spain’s Secret Growth Weapon

It is no secret that Spain has been facing demographic decline for years. Native born Spaniards are only having 1.16 babies per woman, half of what is needed for a stable population.

And the solution to this – a problem that would lead to a stagnating economy and a lack of taxes to pay for pensions and other social services – has been immigration. Around 600,000 per year arrive to Spain as immigrants, almost 1.5% of the economy, 70% from Latin America.

As the Real Instituto Elcano notes:

In 2023 there were 100,000 fewer births and 43,000 more deaths in Spain than in 2013. There have been more deaths than births every year since 2015. But for the influx of immigrants the population would have declined substantially –instead it has increased from 46.6 million to 48.6 million–.

As a result, the foreign-born population reached 18.1% by January 2024. Over 600,000 undocumented migrants gained legal status. The government plans regularizing 300,000 more annually for three years. But even this underestimates the impact of immigration on the economy as another study by the Real Instituto Elcano noted that 38% of those between 25-49 are foreign born. Immigrants now make up 23% of the employed population.

There is no denying that this has created growth. The number of employed in Spain hit 21.7 million in 2024, the highest ever. Quoting a research paper by JPMorgan, The UK newspaper The Guardian stated:

“Overall, Bank of Spain analysis suggests immigration contributed over 20% to the near 3% GDP per capita income growth during 2022-2024.”

While there have been problems with the implementation of this policy, there’s no doubt that it has led to growth. But the danger is that the failure to address the imbalances, especially the deficit in new house building, will lead to a backlash.

As with tourism, Spaniards desperate for relief may turn against their own interests – and their own neighbours. In summer 2025, the far-right Vox party said that they would deport up to 8 million immigrants. They were later forced to backtrack but it speaks to the dangers when problems are left unaddressed.

Housing: Between boom and crisis

There is a direct relationship between at least two of these elements and the current boom in prices and sales in the Spanish housing market; immigration and tourism. The build-out of infrastructure and possibly direct aid to builders may also impact the real estate market but in an indirect way. Even tourism, as I noted above, is an indirect impulse towards home buyers.

Spain’s housing market is feeling the impact of the current boom. Prices surged 7.05% in Q4 2024, reaching €1,972 per square meter, according to stats in a report by Global Property Guide. They go on to note that this is “the sharpest annual increase since recordkeeping began in 2007.”

I wrote last year – and since – that the fundamental cause of this rapid price growth is not a speculative frenzy, like we saw in the lead up to the banking crisis in 2008. It is caused by a lack of construction of new homes, leading to a supply deficit.

The good news is that the market is beginning to catch up to the demand. According to a Caixa Bank research paper on the Spanish housing market:

“For instance, the number of new construction permits increased by 16.7% in 2024 and reached 127,700 homes, representing an increase of some 18,000 permits compared to the previous year. On the other hand, construction completion certificates, which tend to following the trend in new construction permits with a delay of around 18-24 months, also show a slight improvement (98,000 homes completed in 2024, 11.7% more than in 2023) and are expected to steadily increase.”

Beyond Tourism: Spain’s Hidden Strengths

There are other reasons for optimism beyond the revival in new home construction. And it is worth ending on this good news because we are in a good place with a lot of potential.

For instance, in 2024 the Spanish pharmaceutical sector ranked sixth globally and third in Europe for growth markets. Spain is a global leader in renewable and clean energy, ranking number one in investment in the Power Purchase Agreement market. It is number 2 in Europe for installed renewable energy, heading for 80% renewable electricity by 2030.

Spain is also seeing dramatic growth in non-tourism industries and is viewed as an attractive destination for investment both from within the EU and from places like China, which is investing €11 billion.

Foreign direct investment totaled €36.8 billion in 2024 according to the US State Department. Foreign investment now represents 41% of GDP, up 33% since 2018.

The investment surge spans sectors. Real estate attracts foreign buyers. Financial services draw institutional money. Manufacturing facilities expand. Technology companies establish hubs. This capital inflow fuels job creation and economic modernization.

Taking the high and long view, there’s good reasons to be optimistic about Spain’s economic future over the next several years. And there’s even good reasons for optimism when it comes to those problem areas, like housing.

That doesn’t mean we should just cheerlead or be pollyanna about the state of things. There are real challenges, especially the dysfunctional political culture and the desire of politicians to play to their base rather than trade in real solutions. If Spain can navigate between these hazards and push on its strengths, we could see more years of boom and strong markets, including in real estate.

According to numbers that have come out of the National Statistics Institute (INE) of Spain, the housing market here continues to boom and prices continue to rise. Some commentators have suggested there is a bubble forming. 

Others however, including researchers at Caixa Bank, think that the rise in prices has less to do with a speculative bubble and more to do with other factors.

On September 5, 2025, a major article came out in El Pais announcing that the price of second hand homes had surpassed the prices reached during the 2007 bubble, just prior to the crash. The price of new homes had already surpassed this level in the fall of 2020.

This is obviously a psychological indicator because the housing collapse was deeply traumatic in Spain, which was one of the worst hit countries in the EU.

Surpassing this milestone is viewed both good and with trepidation – especially as the prices keep on rising, as El Pais notes:

“The general index, driven primarily by the performance of second-hand homes —which are the majority in both quantity and number of transactions—grew 12.7% compared to the second quarter of 2024, the largest increase since 2007. It has now seen 45 consecutive quarters of year-on-year increases, just over 11 uninterrupted years of price increases.”

This does indeed seem like a shocking growth in prices over a very long period of boom. Prices, on average, are now 78% higher than they were in 2014 when the housing market reached bottom and began to recover. 

On the Costa del Sol, in Marbella, prices have increased by 9.8% in the last year, which is less than the national average but from a much higher level. At €5,162/metre, Marbella real estate is twice the price of the national average.

However, there needs to be some caveats and some perspective when we look at Spanish real estate prices.

First of all, the increase in prices beyond their levels prior to the 2008 crisis is in nominal terms, not in real terms, according to a research paper by Caixa Bank. That is, when we account for inflation, the price of second hand homes is still 23% lower than their peak in 2007. 

The picture is slightly different with new homes, which have risen above pre-crisis levels in real terms in the Balearic Islands, Andalusia, the Canary Islands and Madrid. In the rest of the country the picture is similar to that with second hand homes. 

The Perfect Storm

Additionally, we need to keep in mind that the underlying reasons for the growth in prices are very different than in 2007. Then, the rapid increase in prices was steeper and was driven by speculation and debt. And because it was driven by speculation, there was over-construction of homes with no buyers – there was a mismatch of too much supply for not enough demand.

This time, it is the opposite. 

The Spanish population is growing and will soon pass 50 million people – that’s ten million more than at the start of the 21st century. This is largely due to immigration, as Spanish-born people are not having babies at anywhere close to replacement rate. 

To maintain a growing workforce, pay for social services and pensions for Spain’s baby boomers – and a growing economy – Spain has become a country of mass immigration. For several years immigration has been at a level of approximately 1% per year, similar to countries such as Canada.

That has created a conundrum. On the one hand, Spain needs those immigrants or the economy would stagnate – or worse. On the other hand, no government at any level has instituted the policies needed to dramatically increase housing construction to meet the growth in need. 

The result is too many buyers chasing too few homes. According to a spokesperson from Fotocasa, quoted in El Pais: “of citizens who interact with the buying and selling market, 81% want to buy, compared to 12% who sell.” 

Another Caixa Bank study, found that since 2021 the deficit in home construction – that is, the number of new houses built vs the number of new households formed that need them – has grown from 33 thousand to over half a million in total (see Caixa chart below). 

That’s a huge and obviously unsustainable increase. And it is driving the protests demanding affordable housing that have spilled over into calls for restricting tourism and tourist housing. 

The housing deficit has also grown in a context that has created a perfect storm for price inflation. In the immediate aftermath of the Covid lockdowns, Spain had low debt levels and higher savings than for many years. When the lockdowns ended, there was pent-up demand that led to a surge of house purchases. 

That has been followed by waves of interest rate decreases over the last year, mortgage rates are back below 3%, with the European Central Bank prime rate barely above 2%. That has helped to keep domestic demand up after the passage of the post-Covid surge. According to the first Caixa Bank study quoted above, the number of mortgages increased by 11.2% in 2024.

On top of these structural elements there has been a growth in foreign home purchases in Spain. According to the article in El Pais, house purchases by foreigners have reached 18% of all purchases. 

As a result, if we count the number of completed homes destined to be purchased by buyers living in Spain, the housing deficit is even worse. Caixa Bank says that the rate of construction between 2020-2024 has only met 20% of the country’s actual housing needs, leaving a deficit of not half a million but a massive 765,000. This is estimated to be at the root of 40% of the price increases.

No Construction

Ultimately, the real source of the problem is very straightforward – if not the solution. Spain isn’t building enough homes. This is a problem that emerged after 2007 when there was a massive wave of bankruptcies. 

Often, construction companies would go bankrupt, leaving empty developments of half-completed homes. Banks were forced to take them over and became saddled with billions in bad debt and hundreds of thousands of foreclosed homes.

The government responded by saving the banking sector but at the cost of restricting paths to recovery for the construction sector. Loans became harder to get, capital requirements more stringent. For a decade new housing construction was flat-lined, dead in the water.  

In the immediate aftermath of Covid, the surge in inflation also affected construction materials. So, while there was a housing boom, it was almost exclusively in second hand homes. 

There is good news in all this. While the current growth in prices is posing a challenge for house hunters, there is a growth in the number of housing starts. Permits for new homes grew by 16.7% last year and for the first time since 2018 surpassed the rate of new household formation. That trend is expected to continue and will ease pressure on the housing market over the coming years. 

Secondly, while the price increases look dramatic, they are largely confined to the Mediterranean coastline and Madrid. Over the country as a whole, the price of housing is increasing in line with income growth and the affordability ratio has barely budged. 

That doesn’t mean that there’s not a problem that needs addressing. There clearly is. But it means that there is light at the end of the tunnel. 

Ultimately, it is better to be “cursed” with unbalanced growth than with a balanced collapse in demand. It is easier to adjust an economy that is moving forward than one that is in retreat.

The October 2024 Supreme Court decision permitted community associations of owners to ban holiday rentals within a community or building. There has been a lot of noise since then, a lot of it ill informed or overblown on all sides. Let’s clear things up.

Prior to the Supreme Court decision, a unanimous vote was required for an association of owners to block holiday rentals. The October decision changed that and it was subsequently codified into law by the national government in April 2025. For communities to ban holiday rentals, they require a quorum of 3/5ths and a 3/5ths majority vote for the ban.

It’s important to state that this does not eliminate those vacation rental properties that were already licensed prior to the law coming into effect. And in communities where there is no vote or there is a vote in favour of permitting holiday rentals, things will continue as normal. Associations can also vote for limitations or to approve on a case-by-case basis.

The complaint – and fear – raised by some in the real estate sector, as well as vacation property homeowners, is that this will make homes in those neighbourhoods less attractive to foreign buyers and investors. The ban will have a downward pressure on prices and on sales velocity – in effect you will have to wait longer to sell for a lower price.

As an article on the real estate platform Idealista argues, two properties in the same community – one with a holiday rental license and one without – will immediately have a price difference of 20%. If they were both previously valued at €1 million, the one with the license is now worth €1.1 million and the one without is worth €900k.

No actual sales evidence is provided for this claim apart from the fact the article refers to an apartment in Marbella somewhere. The Leading Property Agents (LPA) association of real estate agents has argued in a release that was published July 22, 2025 by Malaga Hoy that there were already cancellations or purchases and declines in prices taking place in Marbella.

However, no communities or buildings are named so there’s no way to verify this claim. And prices per square metre continue to rise in Marbella as a whole – up 8.3% last year to €5,213/sq metre, with a 1.0% rise between May-July, after the law went into effect. That suggests no general, downward pressure on sales prices or volume.

That is not to say real life examples do not exist. For example, I know of one development in Puerto Banus which is so popular with holiday rentals that over time it has become an excellent place for investors to park money with a more or less guaranteed yield.

Nonetheless, despite its popularity there existed a majority of residential owners unwilling to rent to tourists. As a result, recently the community voted to ban holiday rentals completely. This means any new owner will not have the right to rent their property for short term holiday rentals.

A local agent informed me personally that this has led to the cancellation of the sale of one or two apartments. Another apartment had to be discounted in order to close a deal since buyers were discounting the loss of future income from the sale.

This would appear solid evidence in favour of the argument the ban on holiday rentals will affect house prices negatively. However, I would argue a few examples are not sufficient evidence and secondly the data pool is not representative of the market as a whole.

The New York Experience

Spain isn’t the first place that has moved to regulate and/or ban Airbnbs. New York and parts of California have also moved aggressively in this direction. In New York, there are strict regulations and strong enforcement that have reduced the number of tourist rentals in the city by 90%

According to a Wall Street Journal article and research articles on Apartment List, a website similar to Airbnb but for long term tenants and apartments, the ban has had no impact on prices or supply.  The following charts based upon Apartment List’s numbers below shows this clearly.

There is the market distortion caused by Covid, followed by the exact same pricing patterns afterwards, including after the implementation of the new laws on Airbnb rentals in the city.

A few objections are worth noting. First some claim that not enough time has passed for the full impact to make its way into the market. Secondly, the original number of legal Airbnb’s in New York was relatively marginal – at 38,000 vs 1,000,000 total rental units. Finally, the one definite positive impact that the restrictions can be said to have caused are fewer noise complaints.

Beyond New York, there have been mixed results with some moderately lower rents in Irvine, California after tight regulations were implemented. However, the statistics gathered overlapped with Covid, during which rents fell in cities around the world. That was true in Spain as well.

In Barcelona there has been evidence of rental price declines, though it’s a complicated picture because of former tourist rentals shifting to seasonal rentals to avoid rent controls. Those don’t get counted in the long term rent price numbers.  

This is a phenomenon happening in other parts of Spain as well, with landlords seeking to avoid rent controls in the face of high housing price inflation that is largely the result of a lack of new construction.

In terms of the impact of regulation and bans on short term rentals (STR), the picture in Barcelona suggests that the tightening may have had a delayed impact on the rate of price increase. That is, prices continue to rise but at a lower rate than they were in 2014-2018. That is visible in these graphs from Spanish Property Insight.

However, even here we can’t conclusively determine the cause of this slowing. In 2014 Spain was just emerging from the depths of a property crisis that saw house prices collapse by 37% over a period of six years. The apparent surge in prices could easily be the result of the return of expansion and the release of pent-up demand.

The only clear conclusion that can be drawn is that removing tourist rentals does nothing to counter the real, underlying problem in cities like New York, Barcelona or Malaga: the lack of construction of rental housing. Vacancy rates in New York, according to the WSJ, remain at historically low levels despite the ban.

The only sector that seems to have definitely benefited has been New York hotels, which have seen significant price rises since 2023. According to the WSJ:

“The average rate for a New York City hotel room rose to $283 a night in July, a 7% jump from two years ago. Occupancy has outpaced 2023 levels every month this year except for July, according to CoStar. The city’s program of paying for tens of thousands of migrants to stay in hotels contributed to the higher occupancy.”

A tale of two markets

I would argue that the character of the new law is a response to a very specific market phenomenon born out of the likes of AirBnB, Booking.com et al. This is the industrialisation of private holiday rentals by individual and company investors. And I would contrast that with individuals who rent out rooms or apartments in their homes for supplemental income.

The former  are people or companies buying multiple apartments, mainly in city centres or in high density tourist locations solely for the sake of investment yields. Such practices have created price bubbles, forced locals out of city centres and created friction with residents. According to one research paper, areas with the highest density of Airbnb style rentals experienced a sale price increase up to 19%.  As I wrote back in summer, 2023:

“In Malaga, 74% of listings are by companies and people with multiple properties. Around half a dozen companies have more than 50 properties, and one has 178 listings. In Barcelona, the number of multi-listing “Airbnb hosts” is 71%, with one company alone having 241 listings!”

While it seems dubious that targeting these investors will increase the housing supply or reduce rents substantially, they should nonetheless be treated and regulated as tourist businesses, like hotels.

The Tyranny of the Majority

However, applying a blanket law to all Airbnb properties is a blunt weapon and there are casualties amongst those who haven’t skirted regulations or created so-called “ghost hotels” spread across dozens of properties.

These are the individual homeowners who either want to make a little extra money from a spare room – or who help to cover the annual costs on their vacation home by renting it when they aren’t there.

Such owner-landlords have an interest in preventing wild parties happening in their homes, both to prevent damage to their own property and to stay on good terms with their neighbours, whom they will have to see in the elevator or communal pool. Banning them from occasional rentals in their own homes amounts to a denial of their right to enjoy their home – rather than regulating a large scale commercial enterprise.

What is ironic is that those with vacation homes are actually taxed as though they are renting it out, whether they are doing so or not – including whether they are banned from doing so or not. That suggests that the law needs finessing in order to address these different types of holiday renters.

That could mean, for instance, setting limits on the number of days per year when a property can be rented out or a rental cap on the % of rental licenses in a given community. Such measures discourage investor-landlords, who have no incentive to purchase properties that can only be rented a portion of the year. But it permits owners who want to supplement their income by taking advantage of times when they aren’t in the unit or during festivals, etc.

The effect on Property Prices

Back to the effect on property values of the law as it currently stands. It is too early to know for certain what the effects will be. Secondary effects from legal changes can take some time to show up. The current market also remains strong, based on fundamentals that aren’t going to change overnight.

But we shouldn’t wait until things go badly wrong to fix them – an ounce of prevention is worth a pound of cure, as they say. We can see the possible negatives already. And we know that there are different types of Airbnb users, who should be treated differently by their communities.

The government should be making ongoing revisions to the law to make it a tool that improves things. We don’t need a law that adds more difficulties for another group of people – on top of those that exist because of a lack of affordable housing.

Over the last two years the nature of the employment relationship between real estate agents and agencies has been under relentless pressure. There has been a growing number of government inspections to crack down on what are called “autonomos falsos” – basically employees categorized as freelance to avoid labour regulations and social security contributions.

The process is painful and not without problems but could bring much needed change to the real estate sector.

These changes are not confined to real estate. It’s part of a wider clampdown by the government on the casualization of employment. A far larger target has in fact been food delivery drivers and riders.

According to the government, in 2023 alone over 32,000 workers who were categorized as freelance were “regularized” and made salaried employees. Over a period of 5 years that number is almost 100,000.

That number dropped to just 7,000 in 2024, which likely represented the success of the campaign amongst drivers, with the number of regularizations dropping in transport by 95%. However, the campaign within the real estate sector continues, with Valencia being the tip of the spear. Beginning in 2022, the government began inspections, fines and regularization within the city, then expanding outwards to the province as a whole.

If real estate agencies are found to be using autonomos falsos they can face significant fines that start at €3,750 per agent and can rise to €12,000 per agent. As well they have the obligation to provide social security payments for up to four years during which an employee worked on a freelance basis.

As with taxi drivers and food delivery riders, the casualization of their work is a relatively recent phenomenon. Previously, real estate agents were employees. In the case of transport jobs, casualization is the result of online apps like Uber.

With real estate agents in Spain, this phenomenon has grown as prestigious real estate agencies from abroad have arrived. They have sought to take advantage of the boom, especially in places like Costa del Sol, bringing with them a freelance-only model from the USA and elsewhere.

However, the way that these agencies have used the law has sometimes undermined quality in the sector and, as it turns out, it is sometimes also illegal.

Under Spanish law, for an agent to be truly a freelancer, they must not have any dependency upon the company, nor can there be restrictions imposed or direction given to their activity. Independent agents set their own hours, do not wear uniforms, abide by a company manual, nor can they rely upon the agency’s IT or other equipment.

This confusion, and sometimes deliberate skirting of the law, was revealed by many of the inspections, according to an article in La Vanguardia:

“In some cases, they are indeed business relationships, but in others, they had all the characteristics of an employment relationship,” Junyent [president of the Federation of Real Estate Agencies] acknowledged. One of the inspection reports indicated, for example, that the agents had their own desk in the office, a working schedule, work distribution among teams, vacation shifts, and a company phone and computer. This report was appealed in court, which upheld the inspection’s decision.

By contrast, genuine self‑employment means the agent organizes their time and methods, may serve several principals, uses their own productive setup, bears business risk, and is not subject to the firm’s direction.

When dependency is present, the relationship is laboral and the state collective agreement for real estate applies. That agreement permits commission‑based pay, but it also guarantees a monthly minimum salary, and sets a minimum commission rate for commercial staff of 5% of net fees. If commissions fall short of the monthly minimum, the company pays the difference.

The application of the law throughout the sector is forcing some agencies to choose one of two paths: formal employment or an “agency contract” that meets the legal criteria of independence.

There are some complaints from agencies that don’t want to pay social security deductions – or can’t – and from agents who are high earners on the basis of commission alone. However, it is only a small percentage of agents who are true “high-rollers”, which the rest are caught in the churn.

Too many agencies follow a model of creating an over-supply of agents – which is especially easy during boom times like the present. If an agent performs highly right away, they keep them around. If they don’t catch on quick enough, they are tossed aside at no cost to the agency.

In addition, the complaints from agencies and high-earning agents misses the larger point that formalizing the sector also means professionalizing it.

Spain has no national standards for real estate agents or agencies. Some regions, such as Catalonia do require agents to take a course and have a certificate but in Andalusia, for instance, this isn’t necessary. All you need is a business license, a company name and a phone.

Add to this lack of professional standards agents who are trained unevenly, depending on the quality of the agency. The lack of minimal pay and the mandatory social security contributions that freelancers must pay in Spain also incentivizes agents to do whatever is necessary to make a sale. It is a recipe for problems and even unscrupulous tactics that damage the sector as a whole and the image of everyone who works in it.

This can include misrepresenting aspects of a sale or property to even engaging in illegal activity in relation to renters seeking housing. The government made it illegal for real estate agencies to charge a finder’s fee to home hunting tenants (although this is still widely practiced, in my experience).

Only landlords can be asked to pay. But it is a sellers’ market and landlords don’t need agents most of the time. A lack of strong national regulation leads to a culture of rule-breaking at all levels.

For our part, at Terra Meridiana, we didn’t wait for a clampdown. We have employed our staff since 2003, complying with the law and industry best practices. We believe in a level playing field where all competition follows the same rules and pays the same taxes and social security contributions.

It has to be said that the employer side has not stood still once the government made clear its intention to crack down. In spring 2024, the Federation of Real Estate Companies (FADEI) met with the National Anti‑Fraud Office of the Labour Inspectorate.

The goal is to cooperate on preventing misclassification, clarify criteria, and increase legal certainty for agencies, professionals, and consumers. It is a clear sign that the sector expects enforcement to continue and wants clearer steps to comply.

It is a wise choice to collaborate with the enforcement offices of the government, as well as to educate agencies in the sector. It can be attractive, of course, to try and avoid the law and save money. But the spreading crackdown in the sector – and some high profile, very substantial fines show that this is penny-wise and pound-foolish.

At the start of August, 2025, for instance, the Valencia branch of luxury real estate agency Engel & Völkers was subject to €6.4 million in fines. They were found to have employed 569 agents falsely as freelancers.

Engel & Völkers is a big company and will survive. But with smaller and independent firms, that kind of fine would be a death sentence. It is wiser to choose to follow the law. If you need to provide direction, control and management of your agents – you should hire them. Agency management should also take courses in labour law to ensure that they don’t unintentionally find themselves outside the law.

Ultimately, it is up to each agency to make the determination of how they want to move forward. But, if you want real autonomy, know that you may have to prove it to an inspector. Eliminate any control indicators: no mandatory company IT systems, no uniform manuals or dress codes, no fixed schedules, no assigned territories, and no team rosters that function like staff shifts.

And don’t expect the inspections to stop. In 2023, the Labour Inspectorate received a 41% funding boost to increase inspections. With the crackdowns of food delivery riders effectively over, the real estate sector will remain in the crosshairs.

Some estimate that 40% of agents are currently treated as freelancers, although in my experience it is much higher. Across Spain, there are an estimated 100,000 agency workers. That is a lot of potential “autonomos falsos” and the inspectorate has made it clear that it intends to follow-up on the 20,000 agencies in Spain. It is a chance to have a better, more professional industry if it is handled with clarity and fairness.

The basic premise for any agency – at minimum – must be that they follow the law. The evolution of the industry over the past 2 decades in Spain has made it clear that accountability and professionalism can only be achieved with the employment of agents. This creates incentives to train and retain staff – and disincentives for agents to bend the rules or be dishonest to “make the sale.”

A recent post on Instagram pointed to the housing crisis for youth in the United States. As of writing this, less than a week later, it had drawn over 50,000 likes and a lot of comments and discussion. It was clear that there is considerable anxiety on this issue and with good reason.

This post, by a social media news and culture site known as “Sociaty”, pointed to the fact that the median age of a home buyer in the USA is now 56-years old. That is up from just 31-years old in 1981.

Digging more deeply, that is an increase by more than six years between 2023-2024, according to an article on MSNBC. Home prices are also up by 39% since 2020, to a median price of $435,000. US Mortgage rates, after decades of being low, remain stuck well above 6% for a 20-year fixed-rate mortgage.

As the same MSNBC article noted:

“The median age of first-time buyers also rose from 35 to 38, while the share of first-timers dropped from 32% to 24% of all buyers for the year ending July 2024. That marks the lowest percentage since NAR started tracking the metric in 1981.”

These are all bad signs for young people and the housing market in the USA. But what of Spain? Is the situation here better or worse and what does the future look like?

Spain’s Stressed Housing Market

Much has been written about Spain’s ongoing housing crisis. And the mass movement that keeps returning to the streets demanding real action – which never seems to materialize.

For youth, the problem is in many ways worse in Spain than it is in the USA. From 2010-2021, the average age of moving out in the USA was 26-27. In Spain, the average age was 30.3 in 2022

Undoubtedly, this is the result of housing costs going through the roof, with rents rising by 80% in the last decade. House prices in Spain have also risen and now cost 7.6x a full salary.

As a result, the average age of a first-time home buyer is now 41-years old, 3 years higher than in the USA. And, according to a Caixa Bank study, the number of independently living young people who own a home has collapsed from 66% in 2002 to 31.8% in 2022.

The jarring reality is that the deeper you dig, the worse the situation looks, not just for young people – but it is the youth who suffer the most intense housing challenges. According to a January article in The Guardian, the numbers are stark:

“The statistics that explain Spain’s housing crisis are equally jarring. Rents rose by 80% over the past decade, outpacing wage increases, and a recent Bank of Spain report estimated that almost half of Spain’s tenants spend 40% of their income on rent and utility bills, compared with an EU average of 27%.”

The frustrating part of all this is that everyone knows what the problem is: housing starts in Spain collapsed and never recovered after the 2008 housing crisis. And yet no one is doing anything about seriously addressing this collapse in order to reverse it.

There is a bright spot, compared to the USA, and that is with mortgage rates. While the USA is stuck above 6% and climbing. The rates in Europe, and thus in Spain, have come down considerably. They are now as low as 2.44%, with an average under 3%, according to howtobuyinspain.com

But with buyers in Spain needing to have at least a 20% down payment, the bar is set higher for first time buyers, who are typically younger. On top of the down payment, buyers must pay expenses and taxes, which equals approximately another 10%.

For a first-time home buyer without much equity, 30% is a large sum. On a €250,000 home, that is €75k.

In the UK, you can purchase a home with as little as 5% down payment. In the USA, the average for a first-time home buyer is 9% but can go as low as 3-3.5%.

Spanish Home Buyers Aid Program

There is a Spanish program that will expire in December 2025 called ICO, which stands for the Official Credit Institute. This provides guarantees on mortgages up to 25% of the value of the home, allowing first time buyers up to the age of 35 to borrow 100% of the home’s price.

Young buyers would still have to cover the costs and taxes on the purchase. As noted above, these equal about 10% of the price, so this isn’t a no money down program. But it is something. With any luck this will be extended.

However, unless there is enough home construction to re-balance the supply and demand curves, prices will continue to rise. According to the Spanish National Institute of Statistics, home prices as of June 2025 were rising at an annualized rate of 12.2%. That is six and a half times the broader rate of inflation which is at a reasonable 1.9%.

While it is a good sign that new housing starts rose by 14.5% in 2024, after a decade of stagnation, it isn’t enough to make up for population growth and new household formation. For instance, last year, the number of home sales grew by 10%. If we look at the sale of new homes, the situation is more unbalanced, with new home sales surging by 23.2% last year.

That equals almost 135k new home purchases in 2024, compared to the completion of just 86K houses last year. The number of housing starts may have grown but is still in deficit compared to demand, at 112k units.

Something has to give and, unfortunately at the moment, it is the future of Spain’s youth. They are unable to move out and unable to begin an independent life. For the moment, the Spanish economic situation looks good, with an expected growth rate of 2.6%. That will be amongst the highest in the EU. Unemployment continues to fall and is expected to drop below 10% in 2026, for the first time in a decade.

This is all good news. But if there is no rebalancing of the housing market, the deferred spending of young people as they save to purchase and move out, will act as a drag on the economy.

It’s not just good ethical policy to provide young people with options to begin their lives. It is good economic policy. Homeowners spend more and increase the economic velocity. Excess savers slow velocity, along with growth in incomes and employment. That would represent a lost opportunity that the current Spanish boom is providing.

The current PSOE government has gotten many (most) things wrong in dealing with the Spanish housing crisis. And, to be fair, they aren’t alone in their failures. But sometimes, you have to give credit where credit is due.

On June 4 a letter was sent from Prime Minister Sanchez to the presidents of all of the autonomous regions. It is for the purpose of kicking off negotiations for a new State Housing Agreement. And it actually has some productive proposals.

This is especially true with regards to transparency.

Housing policy in Spain is a complicated matter, along with everything else, because of the many layers of government that exist and the division of responsibilities between them. There is the national government, the autonomous communities, the provincial governments and, of course, local city governments.

Many areas have divided responsibilities with some aspects residing at the national level and others at more local levels. Thus the need for negotiations to establish priorities that will be acceptable to everyone.

The letter itself is focused on what Sanchez describes as three key pillars for a new State Housing Agreement for 2026-2030. These include tripling of funding for public housing – Spain has one of the lowest levels of investment in the OECD – to €7 billion.

There is also a call to protect any new public housing to be protected from future sell-offs. In the past 45 years, the government says, 2.4 million housing units were built but most of them were sold off.

“The government proposes that the regional presidents commit to ensuring that all ‘housing financed with public money permanently maintains its status as social housing and, therefore, always offers an affordable ownership or rental alternative for citizens’.”

The third pillar is the need for market transparency. Sales data in the housing market has been fragmented, partial or hidden up until now. This reduces trust in the real estate market.

Increased Transparency

Taking a proactive stance to increase the affordable housing stock is positive. However, there are questions as to whether that is the most efficient manner for the use of those tax dollars.

For instance, does it mean refusing more efficient private sector housing management in the future even if it would produce more housing that helps more people? Has research been done that shows such an increase in direct housing investment would be more effective than providing public sector incentives?

This is the same government that has mooted the disastrous proposal to tax Non-EU Residents 100% of the purchase price on resale homes. Anyone sane would be skeptical of their intentions or ability to separate ideology from fact.

However, the third “pillar” in the letter – transparency – is worthy and overdue. For too long sales price data has been hidden in shadows:

Finally, Pedro Sánchez proposes ending the monopoly on information held by private portals and creating a public database that would allow state administrations and citizens to know the real sale and rental prices in their city. “Only with such transparency will it be possible to design truly effective public policies and help citizens to negotiate the price of their homes properly,” he argues.

This is a decades long problem and it is time that it is done with. Currently, Spain lacks “a public and reliable database”, which means that the market is dependent upon private portals and approximations cobbled from multiple sources.

The private portals themselves, such as Fotocasa and Idealista, only have asking price data, not the final sales price.

According to the idealista.com article, the proposal by Sanchez calls for a jointly managed system where data can be aggregated and made “available to citizens, universities, and the [real estate] sector through a web portal.” Continuing “blindly”, he notes, isn’t an option.

The good news is that Spain is already improving as a transparent real estate market. The 2024 Global Real Estate Transparency Index (GRETI) ranked Spain as in the top 18 real estate markets in the world. It is in the top 10 in the EU.

Making sales price data public and easily available would strengthen this trend and help build confidence. That is especially true when it comes to the foreign buyers market, which accounts for 19% of market share. Foreign buyers, even more than locals, want transparency – especially those coming from countries where it exists.

Cautious Industry Support

Overall, there has been a positive response to the proposal from industry players and commentators. Idealista spokesperson, Francisco Iñareta has indicated that the portal would commit to making this data available to users.

“At idealista, we are committed to giving this information maximum visibility and adding it to our announcements and reports as soon as the government makes it public.”

However, while Iñareta was positive on the proposal, he noted that the real problem remains a lack of rental supply. And this is because the government “has been systematically attacking landlords for 7 years and there is no sales supply because just over 100,000 houses are built per year, when at least three times more would be needed.”

Transparency is great. So is good policy that encourages the development of the market, not undermining it with measures that discourage house construction and long term rentals.

The commitment to increasing public investment in social housing – if it can overcome the complicated political jockeying and bureaucratic hurdles of Spain’s political system – would be a positive contribution. It could help alleviate supply constraints, though the devil is in the details and we should wait and see how they intend to disburse this cash (assuming anything gets off the ground – a big “if”).

Let’s hope that this process will mark the arrival of sanity and positive proposals that will improve the market. All players will need to demonstrate political will and a commitment beyond electoral positioning. Accepting the proposal to establish a central database is probably the easiest first step and the clearest positive development in some time.