Why do prices go up if sales go down?

The real estate market has started 2026 with a strange ‘photo’ that, a priori, seems to contradict the most basic laws of the market: sales fallbut prices go up. Or what is the same, thousands of fewer operations are closed in notary offices than a year ago without this apparent cooling in demand being passed on to prices, which continue to grow at the same time. double digit after saying goodbye to last year with historical data. The question in view of this duo trend is evident: What is happening?

And above all, what can we expect now?

Fewer homes sold. Although winter is not the time of year more dynamic For the real estate sector, the first quarter of 2026 has left a curious image: despite how tense the market is and that homes continue to be created at much more speed of which new homes are built, in Spain there are fewer houses changing hands. The purchase and sale operations chained three months downward during the start of 2026, which explains why the INE registered a 2.6% decline in the first quarter.

The number: 4,713. To be precise, the INE registered 61,295 transactions of homes throughout March, 2.2% less than during the same month in 2025. If we talk about new constructions, the decline was even more pronounced: 10.2% (5.3%, if we talk about the entire quarter). In general, the aggregate for the year (January-March) is 178,473 purchases, 4,713 less than in the equivalent period of 2025.

The ‘photo’ of the marketOf course, it is not the same throughout the territory. There were eight regions in which March closed with more transactions than last year, with Castilla-La Mancha in the lead; but in eight others (including some of the most populated) the trend was the opposite. In Madrid the INE recorded 2.5% fewer purchases and sales, in Catalonia the decline was 3.5% and in Andalusia 6.5%. The largest falls were recorded in the Basque Country (-11.6%) and Cantabria (-15.4%). The INE is not the only one to detect the setback. In March, the Notarial Council also registered a 4.7% puncture in transactions, more pronounced in the case of apartments.

And the prices? They point in the opposite direction. He latest newsletter from the Ministry of Housing on appraisals shows that, in general, free housing became more expensive during the first quarter of the year until the residential square meter (m2) stood at 2,315.7 euros. For reference, it is 3.8% more than the previous quarter and 13.9% above what was paid a year before. In new housing, less than five years old, the increase compared to 2025 was 12.8% and in used housing (more than five years old) 13.8%.

Once again, the trend was also felt in the offices of notaries. In it same statement in which it notes a general drop of 4.7% in sales in March, the sector reports a 7% rise in the cost of m2. Its balance sheet shows this apparent dissonance even more clearly: apartment transactions fell by 5.8% compared to March 2025, while prices rose by 9.7% to reach €2,332/m2; In the case of single-family homes, operations contracted by 1.1% while the cost rose by 2.2%.

But… Why? The first thing is to take perspective. The market may be stepping on the brakes with respect to 2025, but it continues to move at high levels if we analyze what the sector has managed since the setback that followed the brick crisis of 2008. That is, the 61,295 transactions in March may be less than those of 2025, but they are still well above the 44,664 of 2024. In fact, a year ago we were at record values that have not been seen since 2007.

It is an important nuance because it shows that the drop in sales in the first quarter of 2026, as much as it may attract attention, seems to point more to a gradual slowdown than a sudden turn or change in cycle. The market gives signs, true, but they come after 2025 that closed with more than 700,000 salesthe highest figure in almost 20 years, since the bursting of the brick bubble.

He last balance from the INE also shows that purchases do not suffer throughout the territory. In fact, there are regions, such as Castilla-La Mancha, Navarra, La Rioja or the Valencian Community, Galicia or Asturias, where they have grown.

And the prices? Not everything is uphill. There are those who also appreciate some restraint. A recent study by Idealista shows, for example, that in the first quarter 14% of homes for sale they had to lower their price. During the same period in 2025 that percentage was 11%. Other reports specify that, beyond the general ‘photo’ provided by the Ministry of Housing, there are cities (including some capitals) in which prices have moderated.

something moves. The above helps to put things into perspective, but it does not mean that the residential market is not changing. confirms it in theEconomist José García Montalvo, expert at the Pompeu Fabra University: “The slowdown in sales is one more example of a trend that is corroborated by the increase in sales time, the growing disparity between the prices that sellers want to receive and the growing limitations of buyers due to the difficulty of obtaining credits of the necessary amount for homes whose price has grown rapidly.”

Ángel Talavera, from Oxford Economics, launches another reflection in elDiario: “When prices begin to rise uncoupled from rising incomes, it is likely that purchases will slow down.” The truth is that the cost of housing itself partly explains the slowdown in sales.

Rentals, for example, they continue to get more expensive. And while this makes the purchase more attractive, it also limits the savings capacity of tenants who aspire to become owners, who often have no choice but to rely on donations and inheritances. In recent years has also grown the so-called ‘effort rate’, the years of income needed to pay for a home. Between 2024 and 2025 it increased seven to eight years.

Why doesn’t the price go down? In view of all of the above, the question is obvious: Why does housing continue to become more expensive? Why has m2 continued to rise during the first quarter, reaching a rate that not seen in 20 yearswhile fewer sales were closed at notaries? There are several keys that explain it. One is that Spain continues to suffer a significant housing deficit, a pending ‘hole’ that the Bank of Spain estimates at 700,000 houses.

The key is in the pace at which new housing is built and at which homes that could occupy them are created. In 2025, new construction management visas for housing They were around 139,000 while the number of households skyrocketed in much greater extent: from 19.3 million in January 2024 we went to 19.5. “Since 2021, 1,207 million homes have been created in Spain, while only 474,000 homes have been completed (including free housing and officially protected housing)”, they warn from CaixaBank Research.

Are there more factors? Yes. The creation of homes or one’s own population increase They tighten demand, but there are other factors that come into play and help understand the behavior of prices. Housing remains a valuable asset for investors and the sector has seen how it became more expensive the cost of construction, driven by the effects of the war. That, of course, does not mean that the price per m2 will not soften or remain indefinitely unrelated to the mortgage increaseespecially in a scenario in which buyers have no choice but to rely increasingly in external financing.

“An approach”. “There is a very clear slowdown and the market visions are very different between buyer and seller. Prices continue to rise because the seller does not want to give in. But when he gives in, he does so with greater discounts. It will take time, but prices can go down in a rapprochement between buyer and seller,” comments Montalvo. Talavera is also cautious about the future and fears that the market will cool quickly, although he does not rule out a slowdown: a possible price increase of 10 or 12% this year could go to 3 or 7% next year.

Beyond a possible cooling, real estate experts usually agree that to talk about a drastic drop in prices it would be necessary another scenario: that of a prolonged recession that affects employment.

Earrings of 2027. At the moment what is foreseen report from the University of Oxford is that prices will continue to rise by double digits this year before moderating by 2027. “Affordability is being compromised, especially in the most expensive areas, where most of the demand is concentrated, which has caused a drop in sales at the beginning of the year. This portends a smaller increase from now on.”

Images | Humphrey M (Unsplash) and INE

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