S&P Global forecasts Spain’s house prices will climb 9.3% in 2026—well above the EU’s 4.3% average—driven by strong demand, shrinking households and limited supply amid stable mortgage rates.
Spanish house prices are set to accelerate again this year, with S&P Global projecting a 9.3% rise in 2026. That increase is more than double the expected 4.3% growth across Europe, according to the ratings agency’s latest “European housing markets” report, cited by Europa Press.
After an already-hot 12.3% rise in 2025, price growth in Spain is forecast to moderate over the medium term but remain robust: S&P sees increases of 7.4% in 2027 and 6.2% in 2028. By contrast, Europe as a whole is expected to slow from 6.1% in 2025 to the 4.3% forecast for 2026.
Why Spain is outpacing the rest of Europe
S&P Global points to several “diverse” drivers behind Spain’s stronger-than-average performance:
• Strong demand: population growth in key areas and household formation are increasing the pool of buyers.
• Shrinking household size: smaller households raise overall housing needs.
• Accumulated wealth: savings built up during recent years support purchase power for many households.
• Insufficient supply: new home construction has not kept pace with demand, tightening the market.Macro and financial backdrop
The report notes that economic conditions remain generally supportive of housing markets in Europe, with the unemployment rate a critical factor. In Spain, S&P does not expect a significant fall in unemployment in the near term, which could temper some upside for prices but not enough to stop growth.
Financial conditions are less uniformly favorable. Nominal mortgage rates for new loans were broadly unchanged through 2025 across the euro area, the U.K., Switzerland and Sweden (with Poland an exception). S&P Global believes there is limited room for further interest rate cuts over the next two years, and that the European Central Bank and the Swiss National Bank have effectively ended their easing cycles unless external shocks force a policy shift. That suggests borrowing costs may stay relatively steady, keeping affordability pressure on buyers even as demand stays high.
What this means for buyers, sellers and policymakers
For buyers, persistent price growth and steady mortgage costs could mean pressure on affordability, particularly for first-time buyers in major cities. Sellers and investors may see continued opportunities for capital gains in many parts of Spain, although regional differences will matter. For policymakers, the findings underscore the need to boost housing supply and target measures that support affordability to avoid long-term social and economic strains.
S&P Global’s outlook frames Spain as one of the European housing markets likely to remain “solid” in the coming years—outperforming the continental average thanks to demand dynamics and constrained supply, even as interest-rate relief looks limited.
