Housing Still Needs More Supply

Date: 23 September 2026, 14:15 CEST (Madrid)

INTRODUCTION

This week, one simple signal stands out to me: housing still needs more supply, yet construction activity is losing momentum. The sector contracted sharply in July, just as residential prices remain at record highs; for buyers, this makes it even more important to distinguish genuine scarcity from an excessive price [1].

Mortgage foreclosures on homes have also increased, particularly on primary residences [2]. It does not change my view of the market, but it is a useful reminder of something fundamental: liquidity and a margin of safety matter just as much as choosing the right asset.

And finally, I look at Marbella, Madrid and design. The Golden Mile continues to attract highly limited residential product, while Madrid experiments with timeless architecture, culture and new urban formats [3][5].

At the end of the day, wealth and lifestyle work best together when quality is genuine and difficult to replicate.

Top 3 News 🗞

1. Spain builds less when it needs more housing

Key details

Construction output in Spain fell 9.7% year-on-year in July, compared with a decline of around 2% across Europe [1]. At the same time, the average residential price reached a record €2,355/m² in the second quarter [1].

Implications

If new supply takes longer to grow, I would not expect pressure on good-quality property to disappear quickly. As a buyer, I would remain patient, but particularly alert to irreplaceable homes in established locations [1].

2. Mortgage foreclosures are rising again

Key details

There were 4,989 mortgage foreclosures initiated on homes in the second quarter, 20.9% more than a year earlier [2]. Those involving individuals' primary residences increased by 27.5% [2].

Implications

I see this as a reminder of financial discipline. A good investment should allow you to retain enough liquidity to absorb higher interest rates, renovation costs or unexpected periods without income [2].

3. The Golden Mile favours fewer homes and more space

Key details

A new project in Nagüeles will occupy approximately 50,000 m² for just 33 residences, with completion expected in 2028 [3]. Some terraces will range from 100 to 800 m², while the largest home will offer around 500 m² of interior space [3].

Implications

I like this approach: low density, privacy and generous outdoor space in a location that is difficult to replicate. In Marbella, that kind of physical scarcity may be more relevant to preserving value than adding services without exceptional architecture or location [3].

Building Wealth

Property market and capital allocation

Capital allocation: With weaker construction activity and high residential prices, I would keep capital available for genuinely special opportunities rather than chase the market [1]. Patience remains a valid position.

Financing and liquidity: The increase in mortgage foreclosures reminds me that risk appears when a good property is combined with an overly tight financial structure [2]. I prefer less debt and greater freedom to make decisions.

Supply, Demand and product: Scarcity does not automatically make a home a good asset. I would look for what cannot easily be replicated: an exceptional floor plan, natural light, views, privacy, good architecture and an established location.

Enjoying Life

Trends in design, culture and wellbeing

Design, focused on the senses, wellbeing and health: A coastal home published this week combines concrete, timber, stone and a restrained palette to create a sense of calm, bringing architecture and interiors together from the outset [4]. It is a good example of how texture, light and proportion can contribute more to wellbeing than filling a home with features.

Beauty and Art at home: I am particularly interested in this idea of treating architecture and decoration as one decision [4]. When materials, furniture and art speak the same language, a home needs fewer things and gains more identity.

Lifestyle Madrid, Marbella, Sotogrande: Madrid has just opened a temporary cultural landscape spanning 185,000 m², with twelve pavilions and more than 500 trees, built around a music residency that will continue until 11 October [5]. Marbella, meanwhile, continues to favour low density and privacy in its scarcest locations [3]; two different ways of understanding how design and experience can elevate a place.

Final Thoughts

Do not confuse scarcity with quality.

With less construction, tighter financing and high prices, choosing with judgement matters more every day.

Question: What matters more to me today: the opportunity cost of the capital, or the moments my family and I will share in this property over the next 2 to 8 years?