Why Property Hits Record Highs in 2026 Despite Rising Euribor

The Spanish residential market defies traditional forecasts: property closing prices accumulate double-digit increases while financing costs resume an upward trend. Structural supply shortages and strong foreign demand explain why sales and notarial valuations continue to be pushed upwards in 2026.

Closing Prices: the 2,100 €/m² barrier surpassed

It is important to differentiate at the outset between asking prices —the figures sellers publish on property portals— and closing prices, which correspond to the net amounts set out in the public deed before a notary. It is in these latter figures that a historic shift in the cycle is confirmed.

According to official data from the General Council of Notaries for June 2026, the actual average recorded sale price reached 2,114 €/m², representing an annual increase of 8.8%. It is the first time in the historical series that notarial transactions have, on average, exceeded 2,100 euros per square metre in Spain. In parallel, the House Price Index (IPV) published by the National Statistics Institute (INE) confirms a year-on-year increase of 12.2% for the second quarter of 2026 (a 3.4% quarterly variation alone).

For its part, the Land Registry statistics confirm the same trend. According to the College of Property Registrars, in the second quarter of 2026, the average registered price per square metre rose to 2,487 €/m², recording a year-on-year increase of 9.2% and 2.4% compared to the previous quarter.

Second-hand vs New Build: a widening gap

The price increase is not uniformly distributed across all property types. The bottleneck in new build property production has shifted the bulk of buying pressure towards pre-owned properties, accelerating their revaluation in large urban centres and their metropolitan fringes.

For the second quarter of 2026, the INE breaks down a year-on-year increase of 12.9% in second-hand properties, while new builds registered an increase of 7.4%. The lack of ready-to-build land, extended municipal licence granting periods, and execution costs keep the delivery of new developments at insufficient volumes to absorb the net creation of households.

Euribor Nears 3%: true cost of mortgage repayments

Although the cost of money had provided a temporary respite, inflationary pressures in Europe have pushed the curve back to higher-than-expected rates. According to data from the Bank of Spain, the 12-month Euribor closed August 2026 with a monthly average of 2.954% (compared to 2.798% recorded in June and 2.855% in July 2026).

Despite this increase in cost, mortgage lending has not stalled. According to the INE's Mortgage Statistics, 45,907 property loans were constituted in June 2026, a year-on-year rebound of 10.83%.

Illustrative example: impact of the repayment on a standard mortgage

To understand what this interest rate environment implies for a family formalising their property purchase today, we propose a representative scenario:

• Purchase Price: 200,000 € for a second-hand property.
• Loan amount (80% LTV): 160,000 €.
• Repayment Term: 25 years.
• Variable rate condition: Euribor (2.954%) + differential of 0.75% = 3.704% TIN.

Under these conditions, the resulting monthly repayment is around 819 euros. If the buyer opts to negotiate a fixed rate of around 2.90% TIN with the institution through typical ties (salary and insurance), the repayment would be around 750 euros per month. This monthly difference explains why many buyers prioritise fixed or mixed rates to protect their monthly budget against interbank volatility.

International Buyers: record 15.98% share

Another determining factor in understanding price resilience lies in the weight of foreign buyers. Many of these investors and EU residents have their own funds and do not rely on Spanish mortgage financing.

According to data from the College of Registrars for the second quarter of 2026, purchases made by foreign citizens reached an all-time high of 15.98% of the national total, equivalent to over 26,800 formalised transactions in three months. This buyer profile softens the impact that rising interest rates usually have on purely domestic demand.

Rent and the IRAV Cap: profitability under scrutiny

The rental market is also facing crucial regulatory transformations. The National Statistics Institute set the Reference Index for Updating Housing Rents (IRAV) at 2.49%. This official rate acts as the maximum legal cap for updating habitual housing contracts, decoupling rent from the general CPI (which stood at 3.6% year-on-year in the same period).

For the landlord, this differential requires a detailed calculation of net returns, deducting fixed maintenance costs, homeowners' association fees, and IBI (the local property tax), as income will not fully absorb the general inflation of utilities and services.