The Spanish property market is heading into 2026 with a message that warrants some clarification: although many headlines speak of a ‘slowdown’, prices will continue to rise. Consultancy firm Solvia forecasts that house prices will rise by between 5% and 8% this year, with new-build properties leading the way. For those looking at the Costa del Sol, understanding this nuance makes the difference between waiting and taking action.
A slowdown does not mean falling prices
The ‘slowdown’ refers to the pace of sales, not to prices. In the first quarter of 2026, some 178,000 transactions were completed, just 1.9% fewer than a year earlier, but still the third-best start to the year since 2007. To put it another way: sales are slightly lower than at their peak, but the market remains very active. And as long as demand outstrips available supply, prices will continue to rise.
Why prices keep climbing
The driver is a structural gap between what buyers want and what gets built. Spain would need on the order of 700,000 additional homes to balance the market, while new-build permits remain insufficient due to high construction costs, scarce land, slow permitting and a shortage of labour. At the same time, demand is holding up strongly: mortgage approvals hit their best figure since 2011, and three out of four purchases are financed.
New-build, the most stretched segment
Solvia puts the rise in new-build at 7% to 10%, above resale homes (5% to 7%). It is no coincidence: new developments are gaining share over resale because supply is scarce and demand is high. In areas like the Costa del Sol, where quality new-build is limited and attracts both domestic and international buyers, that pressure is felt especially strongly.
What it means in Málaga and the Costa del Sol
Andalusia remains among the regions concentrating the most sales in the country, and the Costa del Sol is one of its most dynamic markets. On top of rising prices comes rising rents, which in coastal areas and large cities could approach 10% a year: a relevant signal for investors seeking rental yield as well as capital appreciation. For those buying to live or to invest, the outlook points the same way as in recent years.
Conclusion
2026 is shaping up as a year of more contained increases than in the recent past, but increases nonetheless, sustained by supply that fails to meet demand. On the Costa del Sol, where quality stock is scarce, it pays to move with judgement and good information. At EVS Property Group we help you find the right property and assess its investment potential, with local, multilingual advice.
What next? The most useful thing after reading is to look at the real market: browse properties by city or tell us on WhatsApp what you are looking for — area, budget, timing — and we will prepare a tailored selection, with no obligation.
You may also find useful: sell your property invest on the Costa del Sol free valuation monthly price report
