Is Spain's Property Bubble Beginning to Burst? Home Purchases Fall for Second Consecutive Month

Two Consecutive Monthly Declines — A Warning Sign?

Spain's property market, which has defied predictions of a slowdown for much of the past two years, is now showing signs of cooling. Official data from Spain's National Institute of Statistics (INE) shows that February 2026 recorded 59,689 property transactions — a 0.5% decline compared to February 2025.

Taken in isolation, a 0.5% dip might seem unremarkable. But it follows a 5% fall in January 2026 — the largest single-month decline since June 2024 — meaning Spain has now posted back-to-back annual decreases. Combined, the January-February 2026 figures show a 2.8% fall versus the same period in 2025.

New Homes Hit Harder Than Second-Hand

The decline is not uniform across property types. New homes experienced a steeper fall of 1.6% year-on-year, while second-hand properties dipped more modestly by just 0.2%.

The market breakdown for February shows the continuing dominance of the resale sector:

• New properties: 23.1% of all sales
• Second-hand dwellings: 76.9% of all sales
• Market-rate private housing: 93.7% of transactions (broadly unchanged annually)
• Subsidised social housing: Down 7.9% — a significant drop in a segment already struggling to meet demand

Regional Winners and Losers

The national figures mask significant regional variation. Some parts of Spain are bucking the trend entirely, while others are experiencing steep falls:

Strongest performers:

• Navarre: Up 18.7% — the standout performer nationally
• Canary Islands: Up 7.9% — continued demand from international buyers
• Catalunya: Up 5.7% — Barcelona and its surroundings holding firm

Sharpest declines:

• Murcia: Down 14.8% — the steepest regional fall in the country
• La Rioja: Down 12.5%
• Galicia: Down 12.0%
• Asturias: Down 7.6%
• Extremadura: Down 4.9%
• Valencia: Down 4.7%
• Balearic Islands: Down 4.4%
• Madrid: Down 3.0%

The fall in the Valencian Community and the Balearics — both among Spain's most popular destinations for foreign buyers — will be watched closely in the coming months.

A Broader Picture

Total registered property transfers in February — including sales, inheritances and donations — reached 203,513, up 0.7% year-on-year. This suggests that while outright purchase volumes are softening, other forms of property transfer remain active.

Of all registered transfers, 87.6% were urban properties and 12.4% rural — a ratio broadly in line with historical norms.

One positive note: month-on-month (January to February), sales actually rose 3.8% — suggesting the market may be stabilising after January's sharp dip rather than continuing to fall.

Is the Bubble Bursting?

Two months of year-on-year declines do not make a crash. Spain's property market has been characterised by strong demand from international buyers, a chronic shortage of supply in desirable areas, and persistently high prices — none of which have fundamentally changed in the past two months.

However, the combination of rising interest rates over recent years, affordability pressures squeezing domestic buyers, and now geopolitical uncertainty affecting broader economic confidence may be beginning to translate into reduced transaction volumes — the first indicator of a market losing momentum.

Whether this represents the start of a meaningful correction or a temporary pause in an otherwise resilient market is a question the data over the next three to six months will begin to answer.

For buyers currently considering a purchase in Spain — particularly in the Costa Blanca, Costa del Sol or Balearics — the message from the data is nuanced: prices have not fallen, but the pace of transactions is slowing, which may give buyers slightly more negotiating room than they would have had a year ago.

This article is based on reporting from The Olive Press and INE data, published April 23, 2026. Property market data is subject to revision. Always seek independent financial and legal advice before purchasing property in Spain.