Investment in the living sector reached record levels in Spain during the first half of 2026. According to Cushman & Wakefield, private rented sector (PRS), Build to Rent (BTR) and flex living investments totalled €2.934 billion, up 376% year on year and exceeding the volume recorded in any full year in its historical series.
This figure confirms strong investor appetite for residential rental assets, but it also reveals a paradox: investment volumes are growing much faster than the supply of new homes.
The explanation lies in the nature of the transactions. A large proportion of the capital deployed relates to major transactions involving existing or stabilised portfolios, increasing recorded investment volumes without necessarily bringing new homes onto the market.
Record investment, but not record new supply
Cushman & Wakefield identifies several major transactions that account for much of the increase. These include Brookfield’s acquisition of the Fidere portfolio, valued at around €1.05 billion and comprising approximately 5,300 homes; HOOPP’s investment in Avalon, worth around €600 million; and the transaction between Azora and Patrizia, valued at approximately €350 million.
These transactions also reflect how the market is evolving. Some assets developed over recent years are changing hands from developers or initial investors to core capital, which is more focused on holding stabilised assets and generating long-term rental income.
In a sense, this is a sign of the maturation of institutional BTR in Spain.
However, a transaction between investors does not, in itself, create a new home. This explains why strong growth in transaction volumes is taking place alongside much more moderate expansion of the housing stock.
BTR growth slows while rents continue to rise
The accumulated BTR stock has reached around 32,100 units, but its growth has clearly moderated: Cushman puts the increase at approximately 5%, compared with 12% the previous year.
The PRS market, meanwhile, remains at around 27,000 units. The report also identifies another trend that could reduce the professionally managed rental supply: some owners are choosing to sell individual units in properties originally intended for BTR or PRS, taking advantage of high residential property prices.
This helps explain why more investment does not necessarily mean more homes available to rent.
Meanwhile, demand pressure continues to be reflected in rents. According to Cushman, rents across BTR, PRS and flex living have risen by around 10% year on year. In central Madrid’s best locations, prime rents reach €26.7 per square metre per month, compared with €25 in Barcelona.
These are prime-market benchmarks, not overall market averages, but they illustrate the intensity of demand in the most competitive locations.
Yields remain stable
From an investment perspective, prime yields have barely changed.
Cushman places them at 3.85% in central Madrid and 4.10% in Barcelona. In decentralised locations, they rise to 4.15% and 4.40%, respectively.
These figures do not represent the total return an investor will earn, but rather a market benchmark for the best stabilised assets.
The lower yields in central locations generally reflect higher prices relative to rental income and stronger competition for prime properties.
Flex living continues to expand
Flex living continues to grow its presence, although it should be analysed as a segment with its own characteristics.
According to Cushman, Spain now has around 21,400 operational units and approximately another 17,000 in the pipeline. If the entire pipeline were completed, the stock would approach 38,500 units.
Its growth reflects demand for more flexible housing and greater professional and personal mobility, particularly in major cities.
As we discussed in our article on why flex living is attracting increasing amounts of real estate capital, it is also a market in which regulation, operations and location play particularly important roles.
The supply shortage extends to other living segments
The imbalance between demand and supply is not limited to residential rentals.
In student accommodation, or purpose-built student accommodation (PBSA), Cushman places the provision rate at just 6.7%. Operators have approximately 21,000 beds in the pipeline, while cumulative investment in 2026 exceeds €540 million.
Spain combines a large university student population and strong international demand with a still-limited supply of dedicated accommodation, continuing to drive new developments.
Care homes for older people follow a different logic, more closely linked to demographic trends and care needs. Cushman estimates that approximately 100,000 additional beds would be needed to reach the benchmark ratio used in its report. For the highest-quality assets, prime yields currently range from 5.40% to 5.50%.
It is also a market that remains fragmented, leaving room for consolidation and the entry of larger operators.
The challenge is not just attracting capital
The picture for the first half of 2026 confirms that living has become one of the main destinations for real estate investment capital in Spain.
However, record investment should not be confused with an equivalent increase in supply.
A transaction involving an existing portfolio increases transaction volumes but does not add new homes. The opposite may even happen if a property originally intended for rental is subsequently sold as individual units.
That is why the key figure for easing market pressure is not simply how much capital flows into living, but how much of that capital ultimately translates into new homes, operational student accommodation beds or operational care home places.
Spain does not currently appear to face a lack of investor interest in these segments. The real bottleneck remains turning that interest into enough new supply to meet demand that continues to grow.
