Foreclosures on primary homes hit their highest level since 2017: what it means for Málaga and the Costa del Sol

In the second quarter of 2026, 3,703 foreclosures were started on primary homes in Spain, 27.5% more than a year earlier and the highest figure since the first quarter of 2017, according to INE statistics published on 16 September. Even so, the volume remains far below the worst years of the crisis, and almost half of all foreclosures on homes involve mortgages taken out between 2005 and 2008.

For anyone buying or investing on the Costa del Sol, the figures can be read in two ways. They do not herald a wave of cheap bank-owned homes and, with prices at record highs, many owners in difficulty have room to sell before their home goes to auction. These are the numbers.

How many foreclosures were there in the second quarter of 2026?

INE counts the foreclosure certificates that are started and recorded at Spain’s land registries. Between April and June there were 7,141, up 12.2% on a year earlier. Of these, 4,989 involved homes and 4,358 homes owned by private individuals. The rest were commercial premises, garages, offices, building plots and rural land.

Source: INE, Mortgage Foreclosure Statistics, second quarter of 2026, provisional data.

Is this a new wave of defaults like the one during the crisis?

Not for now. In the second quarter of 2014, 9,659 foreclosures were started on primary homes, more than two and a half times today’s figure. The number bottomed out in 2019 and 2020, with some quarters below 1,000, and has since climbed in steps to today’s 3,703.

The age of the loans matters too. According to INE, 46.7% of this quarter’s foreclosures on homes involve mortgages taken out between 2005 and 2008, at the height of the bubble, and another 15.6% loans from before 2005. Mortgages from 2024 and 2025 account for just 1.9%.

Also, starting a foreclosure is not the same as losing the home. Not every case ends in eviction: some are settled beforehand through refinancing, a sale or a deed in lieu of foreclosure.

Nor does foreclosure follow the first missed payment. Since the 2019 mortgage credit law, for loans to individuals secured on a home, arrears must add up to at least 3% of the capital or 12 monthly instalments in the first half of the term, or 7% or 15 instalments in the second half, and the bank must first demand payment with one month to pay. That is why today’s foreclosures reflect arrears from months ago, and September’s rise in the Euribor, above 3.1%, does not yet show up in them.

Why does Andalusia top the foreclosure figures?

Andalusia recorded 1,154 foreclosures on homes between April and June, more than any other region and 24% more than a year earlier. But it is also the region that sells the most homes. Comparing foreclosures with home sales in the same quarter, Andalusia sits slightly above the Spanish average and below Catalonia, Murcia or the Canary Islands.

Source: INE mortgage foreclosure and property transfer statistics. Year-on-year change and ratio: our own calculations.

The province of Malaga does not have quarterly data, only annual figures. In 2025, 608 foreclosures were started on homes, 45% more than in 2024 but 84% fewer than in 2014. And they weigh less than in the country as a whole: there was one foreclosure for every 60 home sales, compared with one for every 48 in Spain.

Foreclosures started on homes per year, according to INE:

Are there more bank-owned homes for sale on the Costa del Sol?

No, and there are very few. As of 17 September 2026, of the 9,157 properties for sale in our Costa del Sol catalogue, just 5 are listed as repossessions by the advertising agency and another 260, or 2.8%, as a bargain or urgent sale.

Prices explain why. According to idealista, the price per square metre in the province of Málaga reached €4,293 in August, an all-time high, and Marbella, Estepona and Benahavís are also at record levels. With a mortgage from 2006 or 2007 and almost twenty years of repayments made, the home is normally worth more today than the outstanding debt, so selling on the open market pays off better than waiting for the auction.

Can you buy repossessed homes at auction?

Yes, through the official BOE auction portal, but there are rules worth knowing before you bid. Since April 2025, the general rule is to deposit 20% of the auction value, with a minimum of €1,000. Anyone who takes part accepts the title documents on file and takes on any charges ranking ahead of the mortgage being enforced.

• You can only view the property if the occupant agrees, and the request goes through the court.
• If the winning bid reaches 70% of the auction value, the rest of the price must be paid within 20 days of the close, a deadline that is hard to meet with a mortgage.
• If the best bid falls short of that 70%, the debtor has ten days to put forward someone else offering at least 60%, or enough to settle the debt.
• Unpaid community fees and IBI property tax can remain attached to the property, so check them beforehand.
• If the home is occupied, after the award you have to ask the court for possession, and that takes time.

That is why auctions suit investors with cash and legal advice. For most buyers, homes sold on the open market by banks and servicers tend to carry smaller discounts, but they can be viewed, financed and bought before a notary like any other property.

What can an owner who cannot pay the mortgage do?

• Talk to the bank as soon as payments start to slip: a payment holiday or a longer term is easier to negotiate before arrears build up.
• Check whether the bank has signed up to the Code of Good Practice and whether the requirements, designed for borrowers without resources, are met: it provides for restructuring the debt, a partial write-off and, as a last resort, a deed in lieu of foreclosure on the primary home.
• Sell before the auction: with prices at record highs, a sale at market value lets the owner pay off the mortgage and keep the difference, whereas at auction the price is usually lower and, if it does not cover the debt, the rest is still owed.

If this is your situation and your home is on the Costa del Sol, a realistic valuation is the first step to knowing how much room you have. At EVS PROPERTY GROUP we can help you work it out, discreetly and with no obligation.

This article is for general information only and is not a substitute for a lawyer’s advice on your specific case.

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