Fear has once again gripped the Spanish real estate sector. The crisis in Iran and the escalating tensions in the region have set off alarm bells in the markets, especially in the energy sector. If the conflict drags on, the global economy could be shaken in a domino effect: inflation, interest rates, and consequently, mortgages in Spain and the rest of Europe will rise. Europe is particularly vulnerable, says José Manuel Corrales, Professor of Economics and Business at the European University, because it is heavily dependent on oil and gas from abroad. A conflict in the Middle East, with Iran at the center of it, instantly sends crude oil prices soaring, and this is immediately felt in the shopping basket of every European.
The European Union imports nearly 97% of the oil and more than 80% of the gas it consumes. If the tension persists, prices and production costs will inevitably rise. Iran plays a key role in the Persian Gulf trade routes, and any geopolitical shock translates into immediate oil price increases, which in turn raise the cost of transportation, production, and services. And, of course, inflation skyrockets, just as central banks are still struggling to control it.
What are central banks doing in this scenario? If tensions in Iran don't ease in the coming weeks, experts are already warning: inflation will rise sharply, likely forcing banks to raise interest rates to try to curb prices. Corrales sums it up well: in recent crises, more than 40% of inflation in some countries came directly or indirectly from energy. If things continue this way, the problem isn't just inflation, but also stagnation: slow growth, low consumption, and high costs for companies and key sectors, such as industry, transportation, and food. The European Central Bank is closely monitoring developments with oil and the tensions in the region.
This has direct consequences for people: those with variable-rate mortgages—which are the majority in Spain—will see their monthly payments rise almost immediately. Even fixed-rate mortgages, in future contracts, could become more expensive as the Euribor rate evolves and financing costs increase. Spain is particularly sensitive to the ECB's actions, mainly for two reasons.
First, because six out of ten mortgages are variable or mixed. Each percentage point increase in the Euribor rate can mean between 70 and 120 euros more per month for an average mortgage. This reduces disposable income in households, slows consumption, and increases the risk of default for the most indebted families.
Second, the impact goes far beyond families. More expensive credit stifles SMEs, stifles investment, and complicates matters for the construction sector. The government is not spared either: each rate hike implies billions of euros in extra interest on public debt. In short, an interest rate hike in this context hits Spain particularly hard, much more so than other European countries where variable-rate private debt carries less weight.
And here lies the ECB's dilemma. If the rise in oil prices ends up permeating core inflation—the inflation that affects wages, services, and food—the central bank will have to think twice about lowering rates; it might even postpone it or reverse the decision. If, on the other hand, it sees this as a passing scare, it might decide not to touch rates to avoid harming economic growth. Corrales makes it clear: a sustained rise in oil prices usually adds between 0.2 and 0.4 percentage points to eurozone inflation. The ECB continues to target its 2% inflation rate in the medium term, trying to maintain balance without pushing Europe into an unnecessary recession.
If the conflict continues and worsens, families will notice their monthly expenses rising, especially for energy and mortgages. This reduces their spending power and ultimately slows economic growth. Experts are clear on this: even though Iran is far away, tensions there quickly affect energy prices, drive up inflation, and influence interest rates in Europe. If this situation persists, those with mortgages and consumers in general will be the first to feel the impact. Ultimately, such a conflict can significantly alter monetary policy and the domestic economy.
The Objective. Available at: https://theobjective.com/economia/2026-03-03/miedo-sector-inmobiliario-crisis-iran/ (Accessed: 03 March 2026).
