If you walk along the main avenues of Malaga or consult real estate portals, the feeling is that the property boom continues: prices are at their highest and owners are optimistic. However, when you lift the bonnet of the market and look at the engine—the actual transaction data—the reality is very different. The engine is seizing up.

To understand where we are headed in 2026, we must momentarily ignore price and focus on the only metric that truly indicates financial health: sales volume. And the volume is screaming at us that the market has peaked.

The national symptom: Spain slows down, Madrid collapses

Data from October 2025 has confirmed what analysts feared: home sales in Spain have fallen again, registering a 1.9% year-on-year decline (to 64,290 transactions).

But the devil is in the regional details. The most alarming thing is who is leading this decline:

• Madrid (the canary in the coal mine): The capital has recorded a much more severe slump, with falls of around 14% – 17.9% depending on the source (INE/Notaries), marking its seventh consecutive month of decline.
• The contrast: While the centre of the peninsula is ‘drying up’, areas such as Andalusia still showed a positive rebound of 2.1% in October.

Good news for the south? Not so fast. This decoupling is temporary. Historically, when Madrid catches a cold in terms of volume, the coast comes down with pneumonia six months later.

Malaga: Ground Zero of the impossible effort

The apparent health of sales in the south hides a very high fever. Back in July, Diario Sur warned that sales in Malaga were growing at half the rate of Spain as a whole, an early sign of exhaustion.

Today, that exhaustion has an irrefutable mathematical cause: we have hit the 60% wall.

According to the latest data from Cadena SER, buying a home in Málaga now requires allocating almost 60% of the family income to mortgage payments.

• The safety limit: The Bank of Spain sets the red line at 35%.
• The reality in Malaga: We are doubling the risk.
• Rental data: The situation is no better for tenants; Malaga is the province with the highest rental costs, requiring 54% of household income, surpassing even the Balearic Islands (53%) and Barcelona (43%).

This 60% is an insurmountable barrier. It is not that people ‘do not want’ to buy, it is that the market has driven out solvent local demand. In the city of Malaga, it now takes 9.8 years of full income to pay for a flat, a figure surpassed only by Palma (11.8 years) and which borders on unsustainability.

The liquidity trap: fewer sales today, lower prices tomorrow

Many owners cling to the 6.7% price increase still reflected in national statistics (or 12% for new builds). But in the property cycle, price is a lagging variable.

What we are seeing is the ‘Sticky Prices’ phase:

1. Current phase: In hot districts of Malaga, prices continue to rise at double-digit rates (>17% in some areas), ignoring the fact that local buyers can no longer afford them.
2. Consequence: Buyers disappear. Madrid is already down almost 18%.
3. The Immediate Future: Stock accumulates. A house that used to sell in 30 days is now stagnating.

What to expect in the coming months?

The equation is simple: fewer sales mean future widespread declines.

If Madrid has fallen by 14-17% in volume, Malaga will follow suit in 2026. With a wage effort of 60%, there is no room for demand to absorb further increases. We will see a two-speed market:

• Luxury/Foreign: Will be able to sustain itself slightly better.
• National Residential: Will undergo a mandatory correction.

The conclusion is clear: The market has already changed, even if listing prices have not yet caught up. If you are a seller, beware of valuations based on the past; the buyer of 2026 does not have the pocketbook of 2024.

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Need clarity in an uncertain market?

Data does not lie, but misinterpreting it is costly.

If you are thinking of selling this year, you need a real market price so you don’t ‘burn’ your property on the portals. If you are looking to buy, you need to know how far to push in the negotiation.

Don’t make decisions based on headlines; make them based on local data.

Drop by our office or call us for a free valuation and a coffee:

📍 Address: Av. de la Paz 1, Benalmádena, Málaga.

☎️ Telephone: +34 952 93 00 33 and +34 661 41 01 38 (WhatsApp)

Your assets deserve informed decisions.