New Housing Construction in Spain: Moderate Growth Fails to Meet Demand in 2026

Spain’s new housing construction sector recorded a 5.6 % year-on-year increase in building permits during the first nine months of 2025, exceeding 100,000 approved units. While this reflects positive momentum, supply remains insufficient to meet demand.

Structural constraints slow down development

Rising construction costs, labour shortages, administrative complexity and stricter planning regulations continue to limit the pace of residential development.

September slowdown raises concerns

A noticeable drop in permits during September suggests developers are acting cautiously amid financial uncertainty and changing market conditions.

Apartment projects dominate supply

Multi-family developments account for most new construction activity, while single-family housing shows minimal expansion due to land scarcity and higher costs.

Ongoing supply-demand imbalance

Major cities and coastal regions remain undersupplied, keeping upward pressure on new-build prices and affordability.

Outlook

Without policy reforms and faster permitting processes, Spain’s housing shortage is likely to persist into 2026.