Demand remains strong in Spain
Spain’s property market recorded a positive month in June, with 59,288 residential property sales, according to the latest figures from the National Statistics Institute (INE). Transactions increased by 5% compared with May and by 1.6% compared with June 2025.
However, the wider picture shows that activity is beginning to moderate from the exceptional levels reached last year. A total of 347,464 transactions have been recorded so far in 2026, 2.8% fewer than during the comparable period of 2025. June’s improvement therefore suggests continued resilience rather than a return to the rapid growth seen previously.
For buyers and sellers on the Costa del Sol, this gradual shift is particularly relevant. Demand for quality property remains strong, while limited supply in many of the most desirable locations continues to influence both availability and pricing.
Property sales remain at historically high levels
June’s 59,288 transactions are broadly in line with the average monthly level recorded during 2025, when approximately 58,700 sales were completed each month.
Rather than indicating a significant slowdown, the latest figures suggest that the Spanish property market is entering a period of normalisation following several years of exceptionally strong activity.
This remains against a backdrop of substantial price growth. Separate INE figures show that Spanish residential property prices increased by 12.9% year-on-year during the first quarter of 2026, with second-hand property prices rising by 13.5% and new-build prices by 9.1%.
For established markets such as Marbella, Estepona, Benahavís, Mijas, and the wider Málaga province, national statistics only tell part of the story. These areas continue to attract an international buyer profile alongside domestic demand, meaning individual locations and property segments can perform differently from the national market.
New-build property continues to attract buyers
One of the strongest elements within June’s figures was the performance of the new-build sector.
A total of 12,766 new homes changed hands during June, representing approximately 22% of all residential sales. New-build transactions increased by 6.3% compared with June 2025.
The continued appeal of new developments is particularly relevant to the Costa del Sol, where buyers increasingly place importance on modern specifications, energy efficiency, communal facilities, contemporary layouts, and properties requiring little or no renovation.
However, the ability of developers to respond quickly to demand remains constrained.
The availability of development land, construction costs, shortages of skilled labour, and administrative processes all affect the speed at which additional housing can reach the market. Where demand continues to exceed the supply of suitable new properties, upward pressure on prices is therefore likely to remain.
This supply-demand imbalance is especially important in prime locations where opportunities for substantial new development are naturally more restricted.
Interest rates introduce a new factor for buyers
Financing conditions are also beginning to change.
The European Central Bank raised its three key interest rates by 25 basis points in June 2026. The deposit facility rate subsequently moved to 2.25%, the main refinancing rate to 2.40%, and the marginal lending facility to 2.65%. At its July meeting, the ECB elected to keep those rates unchanged.
The change is significant for the property market after a period in which improving financing conditions and strong competition between lenders had helped support purchasing activity.
The ECB has subsequently reported that demand for mortgages has decreased, partly as a result of higher interest rates, while banks have also become more cautious about extending credit.
For mortgage-dependent buyers, borrowing costs will therefore become an increasingly important consideration during the second half of 2026.
However, the impact is unlikely to be uniform across every market.
What does this mean for the Costa del Sol?
The characteristics of the Costa del Sol property market distinguish it from many other parts of Spain.
International purchasers, second-home buyers, investors, retirees, and cash purchasers all form an important part of demand, particularly within Marbella and the surrounding coastal areas. As a result, changes to Spanish mortgage affordability do not necessarily translate directly into equivalent changes in demand across the Costa del Sol.
Nevertheless, the wider direction of the Spanish market remains important.
After several years of rapid growth, the latest figures suggest a transition towards a more measured property market rather than a reversal in activity. Transaction volumes remain high, new-build homes continue to attract buyers, and available supply remains constrained in many sought-after locations.
For buyers, this makes preparation increasingly important. Establishing a realistic budget, understanding purchase costs, and arranging financing before beginning a serious property search can strengthen a buyer’s position when the right property becomes available.
For sellers, the market continues to offer opportunities, but realistic pricing is likely to become increasingly important if transaction growth continues to moderate.
Outlook for the second half of 2026
The second half of the year is likely to provide a clearer indication of how the market responds to the changing interest-rate environment.
There are already signs that the rapid expansion of recent years is settling into a more sustainable pace. However, moderating growth should not be confused with falling demand.
Spain continues to record a high volume of residential transactions, while the structural shortage of housing in many locations remains unresolved. The latest INE Housing Price Index reinforces that picture: prices nationally were still rising at double-digit annual rates during the first quarter of the year.
On the Costa del Sol, the balance between supply and demand is likely to remain particularly important. Well-located properties with the specifications sought by today’s buyers can continue to attract significant interest, even as purchasers become more selective.
The market therefore appears to be entering a different phase: less characterised by accelerating transaction growth, but still supported by substantial underlying demand and restricted supply.
For anyone considering buying or selling property in Marbella or the Costa del Sol, understanding conditions at a local level will be increasingly important as the market evolves during the remainder of 2026.
