The 2025 real estate market has become one of the main economic barometers in both Spain and Portugal. Despite global uncertainty and a slowdown in some economic areas, Iberian real estate has shown remarkable resilience and ability to attract capital, driven by investor appetite, easier financing, and strong domestic and foreign demand.
In 2025, real estate investment has kept a solid pace, reinforcing the role of the residential market as a safe haven and strategic destination for investors. The gradual decline in interest rates and improved access to institutional financing have brought new life to a sector that, although still marked by limited supply, continues to generate attractive and stable opportunities for returns.
In both Spain and Portugal, housing prices continue to rise, driven by a structural supply-demand mismatch that has yet to be resolved. The difficulties in increasing the housing stock, due to sluggish urban planning processes, shortage of land, and high construction costs, contrast with high demand, particularly in large urban centers and tourist areas. Access to financing remains a major limiting factor for many buyers, especially in the first-home segment. But foreign demand has become more significant: in Spain, international buyers have increased by more than 11% over the previous year and now represent more than 17% of total transactions, establishing the country's top position as a destination for global residential investment. In Portugal, foreign investment also remains strong, boosted by the international profile of cities such as Lisbon and Porto.
Beyond the traditional sales segment, el living (shared housing), which encompasses models such as Build to Rent, co-living, senior living, and student residences, is gaining ground in institutional investors' portfolios. Its appeal lies in risk diversification and adaptation to new housing needs. Sustained demand for rental housing and a shortage of professionalized supply make this segment one of the potential pillars of growth in 2026.
Another major player of 2025 was the logistics sector, which continues to be driven by the rise of e-commerce and supply chain expansion in southern Europe. Both Spain and Portugal have established themselves as strategic logistics hubs due to their location and connectivity. The metropolitan areas of Madrid, Barcelona, Lisbon, and Porto are experiencing high levels of market absorption, which is keeping returns at attractive levels for specialized funds.
The hotel sector has also performed well, supported by the recovery of international tourism and the solidification of Spain and Portugal as leading destinations in Europe. Investment in luxury complexes – mainly resorts – and hotels in urban centers, remains intense and the outlook for 2026 points toward new operations and capital inflows into projects in this area.
The office segment, on the contrary, has undergone a process of transformation rather than growth in 2025, with the market adapting to new hybrid working models. In major cities, demand is concentrated on high-quality, sustainable, and well-positioned buildings, creating polarization within the office market. In this environment, building renovations and ESG-certified projects are emerging as one of the major opportunities for 2026.
The retail sector, on the other hand, has remained surprisingly strong. Although private consumption has moderated, interest in prime commercial locations remains very high. The main shopping arteries in Madrid, Barcelona, Lisbon, and Porto are operating at near-full occupancy with competitive returns, attracting both major international brands and institutional investors. The dynamism of these areas reflects the recovery of urban tourism and the transformation of retail towards experiential and high-end spaces.
Looking ahead to 2026, forecasts point to a stable investment environment, with moderate growth and greater selectivity in transactions. Investors will prioritize assets in established locations and the ability to generate added value through sustainability, digitization, or necessity. The Iberian real estate market will remain attractive compared to other European markets thanks to its growth potential, although this will be determined by legal certainty, the economic situation in both countries, and the return on assets.
Ultimately, real estate continues to be not only a safe haven for value, but also a key economic driver for Spain and Portugal. Both countries continue to attract capital due to their dynamism, adaptability, and strategic role in the European investment landscape. These factors bode well for a 2026 marked by the pursuit of profitability and long-term value creation.