Housing prices will continue to accelerate in Spain over the coming years. The rating agency S&P Global Ratings forecasts that real estate will increase by 9.1% in 2026, which would make Spain the second European country with the highest rise, only behind Portugal (10%). Additionally, it anticipates that it will lead price growth between 2027 and 2029.
The forecasts, published this Monday, place Spain well above the expected pace for Europe as a whole, where the average increase will be around 4% this year and will moderate to 3% in 2027. For the coming years, the agency predicts that housing in Spanish territory will increase by 7.4% in 2027, 6.2% in 2028, and 5.4% in 2029, percentages that will position it as the residential market with the highest growth among the twelve European countries analyzed, followed by Poland and Portugal.
Although the S&P agency has lowered its forecast for Spain by two tenths compared to that made in February, it maintains a clearly bullish outlook for the Spanish residential market. In contrast, it has revised its estimates for Portugal upwards by three points, which will be the country where prices rise the most this year.
Employment, wages, and immigration continue to drive demand
The study attributes the behavior of the Spanish market to several factors that continue to fuel demand. Among them, it highlights strong job creation, wage growth, and increased immigration, elements that have strengthened the purchasing power of many citizens while the housing supply remains insufficient.
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Added to this are the administrative barriers that, according to S&P, slow down the development of new projects and make it difficult for construction to respond to increased demand. In this regard, the agency considers that, although various European countries — including Spain — have launched policy initiatives to increase the housing supply, the effects will take years to become visible, meanwhile the shortage of product will persist.
The decline in mortgage interest rates will continue to drive prices
Across Europe, S&P expects that the decline in mortgage interest rates will continue to support the evolution of the real estate market in the coming years, although it warns that high unemployment in some countries and weak consumer confidence will act as restraining factors.
