Spain Ahead of Europe: Why the Country’s Housing Market Will Grow the Fastest Until 2028
Spain’s housing market continues to surprise economists and investors: despite the slowdown in Eurozone economic growth and high construction material costs, residential property prices remain among the fastest-growing in Europe. Analysts predict that Spain will maintain its leadership in housing price growth at least until the end of 2028, outperforming major continental economies in key macro indicators, reports Trading Economics.
Current Situation: Figures and Facts
The results of 2025 confirm significant housing price increases:
Spain’s housing price index reached €2153 per square meter, a historic maximum since measurements began.
Annual price growth in 2025, according to official statistics, exceeded 12%, the highest level in nearly two decades.
Housing supply remains tight: the number of available properties decreased by 15-20% compared to previous periods.
These figures indicate a notable imbalance between demand and supply, a key factor sustaining high price growth, according to Bravos Estate.
Forecast Until 2028: Growth to Continue
Several leading analytical organizations and banks predict continued price growth in the coming years:
The average housing price index in Spain is expected to keep rising in 2026–2028, likely exceeding €2280 per square meter by 2028.
Fitch Ratings considers Spain one of the strongest housing markets in Europe in 2026, with expected growth of 8-10%.
The banking sector has revised forecasts upward due to increased demand: after 12% growth in 2025, prices are expected to rise by around 7% in 2026.
These forecasts indicate expectations of steady growth, even if slightly slower than the record-breaking 2025, according to Inmo Investments.
Why Spain? Main Reasons for Its Leadership
1. Demographics and Internal Migration
Spain is one of the few major EU economies with positive population growth due to migration and the formation of new households, boosting basic housing demand.
2. Supply Shortage
Construction of new homes lags behind demand, and available plots for development are decreasing, supporting higher prices. The reduction in market supply is structural, not temporary.
3. Mortgage Rates and Access to Financing
Although rates remain above historical lows, their relative stability, especially via Euribor, keeps mortgages comparably affordable, fueling property demand.
4. Investment Attractiveness
Spanish real estate attracts not only local buyers but also investors from Europe and around the world, particularly in popular locations such as Costa del Sol or the Balearic Islands. This adds extra upward pressure on prices, according to Europ Investment.
Spain Compared to Other European Markets
Elsewhere in Europe, housing price growth remains moderate:
In Germany and the UK, significant but much more moderate price increases of 2-4% per year are expected in 2025–2026.
In Portugal and Bulgaria, growth was above average, but the scale of these economies is smaller, limiting their potential to lead in growth rates.
This means that while some countries experience spikes, Spain maintains a stable and predictable trend, making it an exception among European markets.
Regional Picture Within Spain
Price growth is uneven across the country. In major cities and coastal areas, prices are traditionally higher:
In Madrid and Barcelona, the price per square meter remains among the highest in Europe.
In popular emigration and resort zones such as Valencia, Alicante, and Costa del Sol, prices are rising rapidly, including demand from foreign buyers.
In peripheral areas, growth is more moderate, but average prices continue to increase there as well.
This diverse picture shows that Spain’s leadership is not abstract but reflects complex demand across the country, reports Euronews.
Social Consequences of Price Growth
Sustained housing price growth directly affects people’s lives:
Young families and first-time buyers find it increasingly difficult to enter the market.
The share of household budgets spent on housing rises, and rental availability decreases in major cities and tourist areas.
Pressure on the rental market increases, impacting household social expenses.
Leadership Comes with Challenges
Spain has become one of Europe’s most important housing markets, showing price growth expected to continue at least until 2028. This is driven by a combination of steady demand, supply shortage, and investment attractiveness, which draws both local and international buyers.
At the same time, rapid price increases raise social concerns regarding housing affordability, requiring attention from authorities and regulators, warns International Investment.