Luxury real estate in Spain continues its upward trend, both in terms of price and demand, resulting in a strong and consolidated market. However, there are locations where supply is insufficient.
During the presentation of the real estate market report prepared by Engel & Völkers, the company's president for Iberia and South America, Juan-Galo Macià, stated that they currently have more than 80,000 clients interested in buying luxury homes in Spain, while they only have 8,000 properties in their portfolio.
“Demand is skyrocketing. We are facing a scenario where the scarce supply is keeping prices up in the most exclusive areas, but within a more mature, more segmented and, above all, more selective cycle,” Macià explained during the presentation.
Key markets: Madrid, Costa del Sol and the San Sebastián gateway
E&V says Madrid has become one of the most dynamic and robust property markets in Europe. This is driven by a mix of economic growth, international appeal and quality of life.
Limited housing supply is also keeping demand high in both the city and its wider metropolitan area. However, trends vary by neighbourhood and property type, reflecting the same polarisation seen within the cities themselves.
The average price in the capital has reached €7,145/m², according to transactions managed by Engel & Völkers, representing a year-on-year increase of 15.5%.
- The highest closing prices were recorded in the most expensive neighbourhood in Spain, the Salamanca district, exceeding €18,000/m².
- Chamartín, Chamberí, and Retiro also have a high turnover of properties, as well as newer areas such as Sanchinarro, where the average price has surpassed €6,000/m².
The Costa del Sol continues to show strong momentum across almost all of its markets, with particularly sharp growth in Estepona and Benalmádena. In these areas, up to 84% of home purchases are now completed without financing, rising to 95% in western Marbella.
This shift towards purchases with personal funds is also evident elsewhere.
- In San Sebastián, 38% of transactions in 2025 were closed without a mortgage, up from 19% the previous year.
- A similar pattern has emerged in Valencia, especially in the new-build segment, where 65% of sales are now made with buyers’ own funds.
- The trend is also clear in some of the most exclusive municipalities on the Costa Blanca, such as Orihuela, where the share of cash purchases has increased from 75% to 85%.
A more international and focused profile
Engel & Völkers reports that around half of the buyers of Spain’s most exclusive homes are foreign, a share that climbs to between 70% and 90% in prime coastal areas such as the Costa Blanca and the Costa del Sol.
“We can no longer speak of the Spanish market as a whole, but rather of markets, specifically micro-markets between regions, but also within cities themselves,” explained the Engel & Völkers executive.
This growing polarisation is reflected in a price gap of more than 70% between the regions with the highest and lowest average values, with Madrid at the top end and Extremadura at the bottom.
According to the agency’s analysis, prices are expected to remain under pressure, but without matching the strong growth recorded this year. In Macià’s words, "2024 was the year of recovery, 2025 the year of acceleration, and 2026 will be the year of transformation".
