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For years, there was a simple rule:
new developments in Spain are more expensive, the secondary market is cheaper.
Today, especially in the most desirable regions, this pattern is no longer working.
And investors who still rely on old assumptions may be misinterpreting the realities of the Spanish real estate market.
How Spain’s property market has changed
The Spanish housing market has entered a new phase.
After years of rapid increases, prices have stopped rising steadily.
Instead, we are seeing local price deformations resulting from:
- limited supply of housing
- growing international demand
- a small number of new investments
- Lifestyle migration to coastal regions
This phenomenon is particularly evident in regions such as Valencia, Costa Blanca, Malaga, Madrid and selected parts of the Mediterranean coast.
Why the primary market has always been more expensive
Historically, new developments in Spain have been more expensive by up to 20-30% compared to the secondary market.
The reasons were obvious:
- modern construction standards
- higher energy efficiency
- better functional layouts
- price advantage of developers
This is still the case in many locations.
But not everywhere anymore.
New trend: equalization of primary and secondary market prices
In the strongest micro-markets, we are seeing a marked change.
Prices of new developments and secondary market properties are beginning to level off.
And in some cases renovated second-hand apartments are more expensive than new apartments from a developer.
Why is this happening?
The secondary market in prime locations is driven by:
- Very limited availability of good real estate
- emotional valuations of owners
- Foreign buyers buying location, not standard
- low turnover in prestigious neighborhoods
The result: premium aftermarket prices often rise through scarcity, not quality.
When the secondary market gets more expensive through scarcity
In lifestyle regions, second-hand property prices are increasingly driven by the rarity of the offering rather than technical parameters.
This leads to situations such as:
- Older apartments sold at new development prices
- Properties in need of renovation valued very optimistically
- Prices detached from energy and technical parameters
This is not market irrationality – it is a classic scarcity effect.
But for an investor, it means a completely different approach to value analysis.
Why the primary market is sometimes more rational today
New investments in Spain, despite rising construction costs, are still subject to tough restrictions:
- economics of land acquisition
- the cost of materials and labor
- project financing
- developers’ sales schedules
This creates a natural price discipline.
Paradoxically, in some of the top locations, this makes the primary market today sometimes more reasonably priced than the secondary market.
Just a decade ago, this would have been unthinkable.
Changing perceptions: new doesn’t always mean more expensive
The biggest transformation is taking place in the way the market is perceived.
In many desirable regions of Spain:
- The secondary market is driven by emotion and scarcity
- The primary market is based on cost and planning
Which leads to a surprising conclusion:
New investments are no longer the most expensive option.
Increasingly, they are a more logical investment option.
If you want to see the current best developments from leading developers in Spain, check out my portfolio of premium properties available on Milamar Homes. www.milamarhomes.pl
What this means for investors in Spain
The change has concrete implications for buyers.
1. analysis must be local
National averages are losing relevance. Micro-markets are what matters.
2. the secondary market is not always cheaper
In top locations, the discount may not exist.
3. quality counts throughout the life cycle of the property
Energy, layout and maintenance costs are beginning to win out over price per meter.
4. investment strategy is key
Spain is no longer a single market – it is becoming a mosaic of micro-markets.
What’s next for Spain’s real estate market?
As energy regulations tighten and the supply of new projects becomes limited, the trend of price convergence may worsen.
We can enter a stage where:
- new investments define quality standard
- older housing stock is polarizing
- price logic becomes more complex
Not more predictable – but definitely more mature.
Summary
Spain is no longer a market where there is a simple price hierarchy between the primary and secondary markets.
In many of the most desirable locations, the difference no longer runs between “new” and “old.”
Just between:
The rational price and the scarcity price.
And the ability to distinguish one from the other could be one of the biggest investor advantages in the coming years.
Current primary market projects and selected properties can be found in the listings section of the website: https://milamarhomes.pl/index.php/property-type/rynek-pierwotny/
If you need individual market analysis or access to off-market investments, email me: milamar.homes@gmail.com
Author:
Katarzyna Jagodzinska
Luxury Real Estate & Investment Broker
Milamar Homes
