Real estate development financing in Spain: key insights 2025

At Urbanitae, we published in November 2025, together with KPMG, the Observatory of Real Estate Development Financing with a clear objective: to provide a periodic, rigorous, and data-driven view of how financing in the Spanish development sector is evolving. This is a key area for the residential market and, more broadly, for the country’s ability to generate new housing supply in a context of structurally strong demand.

Six months later, we present an executive update that summarizes the main insights observed over the past semester and identifies the most relevant market movements in development financing. Recent developments confirm the consolidation of trends already identified in the first Observatory, with a financing ecosystem where banks remain the dominant players, but alternative financing continues to gain weight as a complement.

€39 billion in investment and growing alternative financing

One of the key figures in the update is the total volume of investment in real estate development: in 2025 it reached €39 billion, compared to approximately €35 billion in 2024, representing growth of around 11%. This increase aligns with the dynamism observed both in development activity and residential price performance, as well as with strengthened investor appetite driven by significant transactions in the Spanish real estate market.

At the same time, the report shows that bank financing remains stable and with strong appetite, although its relative weight is gradually being complemented by alternative sources. Outstanding bank credit allocated to real estate development stood at €25.06 billion in the third quarter of 2025, compared to €25.23 billion at the end of 2024, according to data from the Bank of Spain.

In terms of the breakdown by type of capital provider, the update reflects a slight shift in the mix: bank financing moves from 56–58% of total volume in 2024 to 53–55% in 2025, while alternative investment increases its share from 30–32% to 33–35%. Although gradual, this shift is significant, pointing to more sophisticated capital structures and a broader financing offering for developers.

Within alternative financing, the update highlights the growth of crowdfunding, which accelerates and exceeds €500 million transacted in 2025. Of this volume, Urbanitae accounts for approximately €260 million.

Structural demand and supply constraints

The update goes beyond financing, providing an updated snapshot of the development market and the factors shaping its evolution. Among these, demographic trends stand out. According to preliminary data from Spain’s National Statistics Institute (INE), the resident population reached 49.6 million inhabitants by the end of 2025, exceeding previous estimates. The report also notes the potential for further population growth due to regulatory changes that could allow the regularization of more than 500,000 migrants.

In terms of activity, new housing permits reached 139,016 units in 2025, a +4.1% increase compared to initial estimates, in a context of robust demand and a housing deficit estimated at around 730,000 units. From a pricing perspective, the average price of new housing maintained its upward trend, reaching €306,296 per unit in 2025. Market estimates included in the report also point to potential further increases in 2026 in both new-build and existing housing.

Taken together, these factors help explain the dynamism of the development market: sustained demand, supply pressure, and a growing need for financing solutions tailored to different project profiles, timelines, and structures.

A well-rounded approach: data, market context, and expert insight

The Observatory update adopts an integrated methodological approach that combines quantitative and qualitative analysis to accurately capture the main market dynamics over the past six months. Specifically, it is based on:

The update of key indicators in real estate development and financing
A structured review of sector developments published over the last six months, related to development and financing
Interviews with key stakeholders, aimed at identifying trends and validating signals observed in the data

This approach provides a balanced perspective: not only what has happened in numerical terms, but also why and how access to capital in real estate development is being reshaped.

Implications for the sector: more sources of capital

Several key implications emerge from the update:

For developers, an ecosystem where banks remain dominant but alternative financiers are gaining ground can translate into greater flexibility in capital structures, especially in projects requiring equity components, bridge financing, or tailored solutions aligned with execution timelines and milestones.
For investors, the growth of alternative financing – and crowdfunding in particular – reinforces the trend toward a more accessible market, with more opportunities and vehicles that allow exposure to real estate through professionalized structures.
For the market as a whole, the consolidation of complementary financing sources can help drive project development in an environment characterized by strong demand and structural supply constraints, where the creation of new housing continues to be limited by factors such as land availability, regulation, and costs.

In this context, Diego Bestard, founder and CEO of Urbanitae, notes that the growth in investment to €39 billion confirms the strategic importance of the Spanish real estate sector and the increasing role of alternative financing as a lever for agility and diversification.