Spain real estate market shifts as cash purchases hit five-year low

The Spanish real estate market is undergoing a structural shift in the first half of 2026. While overall home sales decreased by 3.4% between January and May compared to the same period in 2025, mortgage signings rose by 6.2%.

This divergence is driven by a significant decline in cash purchases, which have dropped to a five-year low. Cash transactions accounted for approximately 25.8% of total sales in the first five months of 2026, down from 32.5% during the same period last year. Experts suggest that rising housing prices are eroding the purchasing power of even those with significant savings, forcing more buyers to seek financing.

Market indicators show that demand continues to outpace supply. The INE Housing Price Index recorded a 12.9% annual increase in the first quarter of 2026. Additionally, the rental market remains under high tension, while real estate investment has reached historic highs.