Buying Property in 2026: Prices Rising, Sales Falling

Buying Property in 2026: Prices Rising Amidst Falling Sales

Is it a good time to buy property? It depends on which side of the counter you're on. In the same stretch of 2026 where sales are plummeting and mortgage repossessions are rising, some flats are selling in two days for 10,000 euros per square meter. The data paints a picture of a market that isn't cooling down: it's splitting in two. In Malaga, a new construction development went from advertising 437,000 euros to asking for 510,000 euros before VAT in just one month. The same flat. Three bedrooms, south-facing. For the buyer who had been waiting a year for a correction, the adjustment was an increase of 73,000 euros.

Why Sales Are Falling But Prices Aren't

The Valencia region leads the slump with a 35% drop in sales in one year. Overpricing and banks tightening credit explain a large part of the slowdown. In the United States, there are more sellers than buyers, at their highest level ever. Yet, here, prices aren't dropping.

There's a repeated explanation: there's no supply. Fewer properties are being sold not because no one wants to buy, but because there's less to choose from. A property costing between 400,000 and 500,000 euros near Barcelona received between 25 and 30 viewings and no offers. A salesperson told the owner it should have already been sold. This could be a lead-generation tactic. Or it could be that buyers with approved loans have run out of credit.

The most honest summary came in a single sentence: a 'non-market' situation, low supply that doesn't allow for discounts, and high demand that, with limited loans, can't proceed. That's not equilibrium. It's a standoff.

Malaga, the Overpricing Laboratory

Malaga has become the best barometer of the imbalance. In El Cónsul, a new development not listed on general portals, the viewing schedule was fully booked a month in advance. The salesperson adjusted the prices, period. From 437,000 to 510,000 euros before VAT. Total: 560,000 euros for a flat.

The pattern repeats across the province: flats viewed with the tenant still inside, walls painted by children, and a seller asking for 10,000 euros just to make an offer and start negotiating. Thirty years investing in all sorts of assets and you encounter this. A sign of a market peak, or simple greed, depending on your perspective.

In other markets, adjustments are already happening, but silently. The difference between the price advertised on property portals and the actual price recorded at the notary reaches 29%. The listed price isn't the real price. It never was.

The Calculation That Undermines Rental Profitability

This is where things get interesting. Some argue that investing in property is still worthwhile even with exorbitant prices: a flat for 170,000 euros, 51,000 euros initial contribution (34,000 down payment and 17,000 in expenses), a mortgage of 136,000 at 2%, and a rent of 900 euros. The complete breakdown, item by item, shows a surprising profitability. But the simulator only works if the tenant pays.

Anyone who has done the real math will disagree: in a well-known neighborhood, gross profitability falls below 4%. And in that scenario, property loses out to almost anything else. Putting 170,000 euros into a flat with a single tenant isn't diversifying. It's concentrating all your risk in one door.

The old-school calculations tell a different story. You buy for 300,000, add 10% for Property Transfer Tax (ITP), deeds, and registration, and you're already at 330,000. Add agency commission, and you start with a 12-15% loss right away. You sell for 400,000, pay capital gains tax, and at least half of the appreciation is gone. The buyer today carries that mental mortgage from day one.

Is This the 2008 Bubble Again?

The parallel with 2008 falls apart as soon as you look under the hood. Back then, mortgages were given for up to 120% of the value, and construction was unchecked. Today, you can't get more than 80%, construction is limited, and easy credit is a distant memory. Only the price is similar.

This is the thesis of those who believe the market won't burst. And there's a painful counterexample anyone can verify: a new construction property, second phase, costs 130,000 euros more than the first phase delivered three years earlier. Same building, same neighborhood. No salary keeps pace with that.

The conclusion of the most seasoned observers is uncomfortable: every year seems like the worst time to buy, and looking back, it always was. The cauliflower ladder – eat it today because it will be worse cold.

Rent, Squatting, and the Antiestéticar That Drives the Market

A significant part of the adjustment that isn't happening is explained by legal certainty, or the lack thereof. The debate around 'inquiokupas' (tenants who stop paying and stay) and the equivalence of rooms to Catalonia's Housing Law (LAU) have entered the conversation fully. The dominant thesis: as long as evictions aren't swift, landlords won't put properties on the market. Less supply means higher prices.

Portugal has already made moves in this direction. Here, the proposal still being discussed goes in the opposite direction for many: intervening rent prices without affecting demand, which they argue only further reduces the pool of available housing. Closed houses, room rentals, and the buffer of tourist flats are the symptoms.

The Factor Almost No One Dares to Mention

Demand pressure has a demographic component that some analyses attribute to the arrival of migrant populations, who rent shared rooms and drive down prices in quality while increasing demand in quantity. Another segment of the discussion argues the opposite: that if employment deteriorates, some of that flow may reverse and alleviate pressure. Historical statistics from 2009, when many people left, are used as a precedent.

This is where analysis intersects with politics and stops being clean. Housing is measured, population is projected, and no one wants to sign off on the forecast.

With these elements, the only real consensus is that no one wants to be the one to sign at the worst time. The problem is that with each passing year, that moment seems to have been the previous one.