The property market has had enough

PUBLISHED ON

Julio 06, 2026

CATEGORY

Real Estate

We’ve been hearing the same story for years. The market rises, prices go up, everyone wins. And against this backdrop of euphoria, something has proliferated that is now beginning to take its toll: opportunism disguised as professionalism.

I’m not referring to those who’ve been in this business for decades. I’m referring to those who arrived when house prices were rising by 20 per cent a year and that tailwind made them look like experts. When the market hands you that margin on a plate, any deal works out. You don’t need to know anything, you don’t need judgement, you don’t need to know the product or the client. All you need to do is buy, renovate just enough and sell before the market cools down.

That moment has passed.


The pencil that gets fatter on its own

In recent years, we’ve heard stories in the sector that have left us thinking. You buy at €15,000 per square metre and sell at €25,000. Margins of 40 per cent, 50 per cent. Deals that sound extraordinary when recounted at dinner parties, in forums, or in presentations to investors.

And those of us who’ve been in this sector for a while are left wondering: are we the fools for not seeing those figures?

No. The thing is, it’s very easy to pad the figures. Those of us who’ve been in this market for a while know that those figures, today, aren’t realistic. The purchase price is rounded down, refurbishment costs are minimised, deadlines are ignored and financial expenses disappear from the narrative. What’s left is a nice story designed to attract investors, to make things seem bigger than they are, and to compete in that silent contest to see who has the highest profit margin.

But the market doesn’t care about stories. It cares about real figures.

The owner who checks Idealista

One of the most serious problems in the current market doesn’t come from those who renovate and sell. It comes from owners who put their homes up for sale by looking at prices on Idealista without doing the actual maths. They see that in Recoletos, properties are being offered at €17,000 or €18,000 per square metre and conclude that their flat — unrenovated, with a layout that makes no sense, and a kitchen that hasn’t seen any investment in twenty years — is worth the same.

It is not worth the same. But whilst the market was rising at that rate, the mistake corrected itself. Time and inflation masked the absurdities. Not anymore.

The sellers’ market is over

For years, we set the prices and the market went along with it. Viewings came thick and fast, offers piled up, and sale times got shorter. Today, that’s no longer the case. Viewings have dropped. Sale times have lengthened. Buyers – who have also learnt their lesson – no longer accept just anything at any price.

And the consequences are beginning to become apparent in specific cases. Velzia, one of the most high-profile house-flipping firms in Madrid, admitted to its investors this month that it had a total debt of 42 million euros and had gone five consecutive months without selling a single flat. Eleven projects on the Madrid primary market have had construction work halted due to cash flow problems. The company’s own CEO has publicly admitted it: they made a strategic error and the market has made them pay the price.
This is not an isolated case. It is a symptom of something deeper: what happens when a market in a state of euphoria attracts those who should not be in it, and when that market ceases to be forgiving.
What lies ahead
The market is not going to collapse. Madrid remains an extraordinary city, with genuine demand and international buyers who continue to look this way. But it is going to undergo a shake-out.
From now on, only those who truly know what they are doing will be able to survive. Those who really know the market, can spot trends before they become obvious, understand the buyer and offer them a product that lives up to what they are paying.
Clients can no longer be treated unfairly — paying luxury prices for properties that fail to meet the minimum standards of that segment simply because the market was rising and everything was selling anyway.
That is over. And it is not bad news. It is a necessary correction.
Those who know their trade will carry on. Those who simply rode the wave will have to find another one.