Is it worth investing in Spanish real estate in 2026? The numbers show that it is—but it matters what you buy.

The Costa Blanca and the Costa del Sol have been among Europe’s most popular real estate markets for years. However, ads often promise returns of 8–10%, which can easily give the impression that almost any property is an excellent investment.
The reality is much more nuanced.

The net return is not the same as the figure listed in the ads

Returns of 8–10% are generally gross figures. Once you subtract purchase costs, taxes, furnishings, operating expenses, platform fees, common area fees, property taxes, insurance, accounting, maintenance, and income tax, the real picture is quite different.
Based on current market data:

an average short-term rental property generates a net return of 2.8–3.5%,
a carefully selected property in a good location can achieve a net return of 4.2–4.5%,
and with an optimized medium-term lease, the net yield can be as high as around 4%.

Therefore, the question is not whether it is worth buying in Spain, but rather which project to choose and for what purpose.

Rent is just one source of income

A well-structured Spanish real estate investment rests on three pillars:

net rental income,
appreciation of the property’s value,
and the availability of favorable bank financing.

Real estate prices continue to rise

Based on actual notarial sales transactions between 2019 and 2025:

property prices in the province of Málaga rose by an average of 8.3% per year,
while in the province of Alicante, they rose by an average of 6.4% per year.

These are not asking prices, but statistics based on actual sales transactions. According to BBVA Research’s forecast, at the national level:

a rise in housing prices of approximately 12% is expected in 2026,
and 5.7% in 2027.

These are, of course, market forecasts, not guaranteed returns.

Demand remains extremely strong

Between May 2025 and April 2026:

33,279 properties changed hands in the province of Málaga,
and 52,847 in the province of Alicante.

The average transaction price:

was 364,378 euros in Málaga,
and 203,488 euros in Alicante.

All of this clearly demonstrates that we are still dealing with an extremely active market.

Foreign buyers account for a significant portion of the market

According to notary statistics:

In the province of Málaga, 42.5% of sales,
and in the province of Alicante, as much as 51.5%

are carried out by foreign buyers. This means that in the province of Alicante, foreigners now purchase more properties than Spaniards. The strongest demand continues to come from British, Dutch, and Polish buyers.

Financing Can Make the Return on Investment Even More Attractive

Spanish banks can currently finance up to 70% of a property’s value for non-resident buyers.
Fixed-rate loans typically range from 2.8% to 4.5%, and with a strong credit profile, interest rates as low as around 3% are available. With carefully selected properties, rental income can cover a significant portion of the loan payments over the long term, while appreciation affects the property’s total value.

Important Changes in Short-Term Tourism Rentals

Since 2025, regulations governing short-term rentals have become significantly stricter.
In many cases, obtaining a new tourist rental license now requires the approval of 3/5 of the condominium owners.
In addition, several municipalities have temporarily restricted the issuance of new licenses:

the city of Málaga until August 2028,
Alicante is expected to do so until January 2027,
while Jávea, Dénia, Guardamar del Segura, and several other municipalities have introduced partial restrictions.

Therefore, before making any investment today, it is advisable to verify whether the property in question is suitable for the intended rental purpose.

Why Are Spanish Real Estate Prices Continuing to Rise?

The market is driven by several mutually reinforcing factors.
Spain’s economy remains one of the fastest-growing in the European Union. In 2025, GDP grew by 2.8%, and 705,000 homes were sold nationwide—a 10.4% increase compared to the previous year and the highest figure since 2008.
All of this is complemented by excellent infrastructure:

Málaga Airport serves nearly 27 million passengers annually and offers 162 direct destinations,
Alicante Airport serves nearly 20 million passengers with 145 direct routes,
there are more than 40 international schools on the Costa del Sol and more than 30 on the Costa Blanca,
and 300–320 days of sunshine per year make the region attractive not only to tourists but also to long-term residents.

The most important lesson

The Spanish real estate market continues to offer significant opportunities, but today it is no longer enough to simply choose a good location.
The expected return is significantly influenced by the quality of the project, its micro-location, the rental strategy, the current regulatory environment, and the method of operation.
At Feeling-Spain, we therefore do more than just present properties to our clients. We help compare expected net returns, analyze the legal environment, financing options, and long-term appreciation potential so that our clients can make truly informed investment decisions.

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