Spanish housing prices rise 14.7% as mortgage effort exceeds 65% in Madrid

National price increases and regional variation

Spanish residential housing prices for new and used homes rose 14.7% year-on-year in the third quarter of 2026, according to a report published by valuation firm Tinsa. Quarter-on-quarter, prices increased by 2.8%, showing a slight deceleration from the 15.5% annual growth recorded in the second quarter. Regional price growth varied substantially across the country, led by the Valencian Community with an increase of 21.9%, followed by Castilla-La Mancha at 20.5%, Cantabria at 18.7%, and the Basque Country at 15.2%. On a quarterly basis, the Valencian Community also recorded the highest increase at 5.6%, ahead of Cantabria at 4.9% and the Basque Country at 4.4%, whereas Madrid, Catalonia, and Asturias recorded 0.9% quarterly growth.

Local market disparities and Andalusian figures

Across provincial capitals, annual price movements ranged between 1.0% and 22.9%, with 39 provincial capitals recording increases above 10%. Sixteen capital cities matched or exceeded their nominal peak levels from the 2007–2008 property bubble. In Andalusia, housing prices rose 10.8% year-on-year to an average of 1,789 euros per square meter. Málaga led Andalusian capitals with a 13.8% increase, followed by Huelva at 13.0%, Seville at 12.9%, Granada at 10.5%, Córdoba at 9.0% (at 1,819 euros per square meter), Jaén at 8.9%, Almería at 4.9%, and Cádiz at 1.0%. Non-capital municipalities near large employment and tourist centers recorded even steeper annual increases, led by Torrejón de Ardoz at 30.0%, Sagunt at 25.7%, Viladecans at 24.8%, and Orihuela at 22.4%.

Household mortgage effort and affordability strain

The financial effort required to service a mortgage exceeds official recommendations across large urban centers. Official guidelines recommend that housing expenses not exceed 35% of household income, but the national average reached 36.9% in the third quarter of 2026. In Madrid, mortgage payments require more than 65% of the average annual salary, with Barcelona following closely at 64.1%. In Málaga, households allocate 54.5% of income toward mortgage payments, while Cádiz requires 50.5%, Valencia 46.9%, Seville 46.6%, Granada 40.0%, and Zaragoza 36.7%. Cristina Arias, director of the research department at Tinsa, described the widening regional affordability divide:

In the main employment hubs and tourist hotspots, the difficulty of accessing housing has reached critical levels for several periods and exceeds, in some cases, 50% of the average household's disposable income.

Structural drivers and housing deficit

The gap between wages and property values has widened over the past decade. National Statistics Institute (INE) data shows Spanish home prices rose 80% over the last ten years, while average salaries increased by 30%. Tinsa attributed the continued upward pressure on prices to persistent supply shortages, elevated construction costs, and inflation that sustains higher interest rates. A prolonged deficit in new home construction continues to constrain available supply across the country. Bank of Spain Deputy Governor Soledad Núñez estimated that the accumulated housing deficit will reach one million units by 2028.