House prices in Spain are now expected to rise more sharply than previously forecast, according to updated projections from Bankinter.
Short supply, strong employment and sustained investor demand continue to push values higher, the major bank said in its latest markets report.
Analysts at the lender predict residential property prices will surge 12% in 2025, four percentage points higher than its earlier estimate.
Prices are then expected to climb a further 7% in 2026, before easing to 4% growth in 2027.
Bankinter says the upward revision reflects a combination of factors, including continued investor appetite for property, strong job creation and what it describes as ‘structurally blocked’ land supply for new housing developments.
‘The generous liquidity that currently exists will continue to support all asset classes, including property,’ the report states.
‘This is particularly true in countries like Spain, where the release of land for housing development is effectively paralysed by public authorities.
‘Combined with the positive evolution of employment, this has led us to revise our house price forecasts upwards.’
The bank also points to limited housing supply and rising rents as key drivers behind the ongoing price growth.
According to the report, the strongest increases are expected in large cities, the Mediterranean coast and Spain’s islands, where population density and foreign demand remain high.
These regions, it notes, are likely to continue attracting international buyers, investors and lifestyle purchasers, intensifying competition for available homes.
The report concludes that, across southern Europe, housing supply constraints – rather than weak demand – remain the dominant force shaping the market, a dynamic likely to continue putting upward pressure on prices in the years ahead.
