Less housing and more expensive: BBVA's forecasts point to a 12% price increase

BarcelonaLess housing supply and, therefore, rising prices. These are the forecasts for the housing market made by BBVA Research (the research service of the blue bank) for 2026. Thus, the bank forecasts that purchase and sale transactions will fall by 7.3% in the State as a whole, while prices will rise by an average of 12% in Spain.

According to BBVA Research, the situation could improve slightly in 2027, with a 0.6% recovery in transactions, while prices next year will continue to rise due to the imbalance between supply and demand, with an increase of 5.7%. The report also warns that the residential deficit will continue to increase and points to the capacity of the electricity grid as another factor that may limit housing construction.

The bank's research service indicates that housing demand will continue to be supported by relatively low interest rates, employment and real wage growth, intense household formation driven by immigration, and the maintenance of relevant foreign demand. However, these factors will not be enough to sustain the volume of sales due to the persistent lack of available housing.

After a weaker-than-expected performance in the first months of the year, BBVA Research has revised its sales forecast for 2026 to a fall of 7.3%. The report points out that the sharp increase in prices and the limited availability of housing will moderate market activity, although sales will continue to be at historically high levels. In 2027, a moderate recovery is expected, with an increase of 0.6%, which would place transactions slightly above 700,000 homes.

Despite everything, residential supply will continue to grow over the next two years, the report indicates. BBVA Research forecasts that new construction permits will increase by 10.1% in 2026 and 12.6% in 2027, while initiated homes will go from 139,000 in 2025 to 153,000 in 2026 and 170,000 in 2027. At the same time, the bank estimates that this increase will boost investment in residential construction to 5.7% of GDP in 2026 and 6% in 2027.

However, this production rate will continue to be clearly lower than the growth in households, estimated at 223,000 in 2026 and 217,000 in 2027. As a consequence, the housing deficit will continue to increase and will reach approximately 885,000 homes in 2027, concentrating especially in areas with the highest demand. Therefore, housing scarcity will continue to be the main factor explaining the evolution of the residential market. BBVA Research predicts that insufficient supply will continue to push prices up: by 12.0% in 2026 and 5.7% in 2027.

The report positively assesses the National Housing Plan 2026-2030, but, despite allocating more resources to increase supply, it considers that it will not grow sufficiently. The study points out that the planned resources remain limited given an estimated deficit of approximately 700,000 homes in 2025, and recalls that the main obstacles to increasing supply persist: the scarcity of developable land, the lack of labor, regulatory uncertainty, and the complexity of urban planning processes. Furthermore, the effectiveness of the Plan will depend on coordination between administrations and the capacity to mobilize private investment.

The electricity grid, a bottleneck

BBVA Research identifies the availability of capacity in the electricity grid as a factor that may be limiting residential development in some areas. The expansion of the grid in large urban developments can take between five and eight years, while more than 80,000 planned homes currently depend on new electricity infrastructure.

The study points out that 88% of electricity distribution nodes have less than one megawatt of free capacity, which limits the connection of new residential projects of a certain size. Given the advance of the electrification of the economy, BBVA Research proposes to accelerate investment in electricity grids, improve coordination between urban and energy planning, optimize the allocation of available capacity, and promote energy storage and system flexibility to prevent this restriction from further slowing down housing construction.