The bank has revised its forecasts and now calculates that prices will grow more than they anticipated a few months ago. According to their latest report, housing prices in Spain will end 2025 12% higher, four percentage points above their previous expectations. And in 2026, they will rise another 7%, three percentage points more than previously forecast. For 2027, Bankinter predicts a 4% increase.
What explains this shift? The bank points to several reasons: strong investment in the real estate sector, positive employment trends, and the ample liquidity available in the market. This liquidity continues to drive up the price of all assets, including housing, especially in countries like Spain, where very little land is being released for construction. This is compounded by a lack of supply and rising rents. Bankinter highlights that the greatest impact will be felt in major cities, the Mediterranean coast, and the islands, where there is high foreign demand and limited available housing.
However, while the price increase will be significant in Spain, Bankinter believes Portugal will be even more affected. This year, they expect prices there to rise by 15% (three percentage points higher than in Spain) and another 10% in 2026. In 2027, they forecast an 8% increase, double that of Spain. Why? In Portugal, supply is very limited, there is high international demand, and the government has implemented incentives for young people to buy homes. Therefore, the real estate market remains one of the major sources of economic and social pressure in the neighboring country.
Meanwhile, Ireland is following a different path. There, the rate of price increases is expected to slow year after year. By 2024, Bankinter estimates that housing prices will rise by 7.5%, less than in Spain and Portugal. In 2026, the increase will be 7%, the same as in Spain and three points less than in Portugal. And in 2027, the rise will be 6.5%. So, although in two years Ireland will surpass Spain in the rate of price increases, it will still lag behind Portugal.
