Property market 2027: Spain set to lead Europe's growth. What about the Costa del Sol?

Property market forecasts for 2027 put Spain at the top of the European table. According to the European Outlook 2027 report by Italian consultancy Scenari Immobiliari, the value of property transactions in Spain will grow by 10.7% in 2026 and 10.2% in 2027, to around €156 billion, while house prices will rise by 10% this year and 7% next year. These are the strongest gains on the continent.

The other side of the story is size: even while growing faster than anyone else, the Spanish market will remain the smallest of the big five, behind Germany, France, Italy and the United Kingdom. And on the Costa del Sol, where international buyers play a decisive role, prices have already left double-digit growth behind and are rising at the more moderate pace the report expects for Spain as a whole in 2027.

How much will the Spanish property market grow in 2026 and 2027?

Scenari Immobiliari presented its report on 18 September at its annual forum in Rapallo, Italy. The study calculates the value of everything bought and sold each year in each country (homes, offices, logistics and retail premises) and projects how it will evolve up to 2027. These are its figures for Europe's five largest markets:

Spain is the only large market to grow by more than 10% in both years, with Italy close behind. Germany and France, by contrast, will grow by between 1.9% and 3.5% a year. For Europe as a whole, the report forecasts €1.36 trillion in 2027.

What house price growth does the report forecast?

In housing, the gap between countries is even wider. Scenari Immobiliari expects prices in Spain to rise by 10% in 2026 and 7% in 2027. This year, the Spanish increase is more than double Italy's and over five times that of Germany or France, where prices have only just returned to growth:

The forecast is consistent with what official statistics already show. According to Spain's National Statistics Institute (INE), house prices rose by 12.2% in the second quarter of 2026, slightly less than in the first. The report assumes prices will keep rising, but with less and less momentum.

If Spain is growing faster than anyone, why is its market still smaller?

Because each country starts from a very different base. In 2027 Germany will turn over more than twice as much as Spain, and France, Italy and the United Kingdom will also stay ahead. Behind this lie larger economies and populations and much deeper office and logistics markets, a gap that two years of 10% growth cannot close.

The telling part appears when growth is measured in euros rather than percentages. Between 2025 and 2027 the Spanish market will add around €28.2 billion in annual volume, twice as much as Germany or France (around €14 billion each), even though the Spanish market is less than half the size of Germany's. Only Italy adds more, at €31.4 billion. Capital is on the move, and Southern Europe is where it is heading.

Professional investment points the same way. According to the figures compiled by Scenari Immobiliari, property investment in Spain rose by around 60% in the first half of 2026, to €12.5 billion, while it grew by 3% in Germany and France and fell by 16% in the United Kingdom.

What is driving the Spanish property market?

The consultancy puts it down to solid macroeconomic fundamentals and the country's ability to attract both domestic and international capital. Its founder, Mario Breglia, also points to the strength of the Spanish economy, demographic momentum and interest in two specific segments: housing and tourism.

Housing, tourism and foreign buyers are precisely the three pillars of the Costa del Sol. In the province of Malaga, more than one in three homes sold in the second quarter of 2026 was bought by a foreigner, according to notary statistics: 37%, second only to Alicante.

Are Costa del Sol prices rising at the pace the report expects?

They are ahead of the cycle. According to idealista, asking prices for homes in the province of Málaga rose by 7.4% year on year in August, to €4,293 per square metre, compared with 12.5% for Spain as a whole. In September 2025 the province was still growing at 14%. The province, with the Costa del Sol as its engine, is already moving at the pace Scenari Immobiliari expects for Spain as a whole in 2027, but with prices 47% above the national average.

The report does not break its forecasts down by province, so it gives no figure for house prices in Málaga in 2027. What the data does show is that, within the province, the map looks like Europe's. Prices are rising fastest in the municipalities with the most room to grow, such as Estepona, and more slowly in the most established markets, such as Marbella or Fuengirola. These are idealista's August figures alongside the median asking price of the homes for sale in our portfolio in September:

Estepona, where a square metre is still 17% cheaper than in Marbella, is up 17.4%, outpacing even the Spanish average. Marbella, the most expensive municipality in the province, and Fuengirola, a very established urban market, are rising by between 3% and 4%, while Casares has actually fallen by 3.7%. On the eastern coast, Estepona's pattern repeats itself: Vélez-Málaga is up 25.4% and Rincón de la Victoria 13.4%.

In our portfolio, the 8,810 homes for sale have a median price of €650,000 and €4,657 per square metre, virtually unchanged from August. We publish these medians every month, municipality by municipality, in our Costa del Sol price report.

What does it mean for buyers, sellers and investors on the Costa del Sol?

• If you are buying: the report does not foresee falling prices, just a less frantic market. In the municipalities rising by 3% to 4% there is a little more room to compare and negotiate; in those growing at double-digit rates, waiting has proved expensive over the past year.
• If you are selling: with more moderate growth, the asking price matters more than ever. A home listed above its market value will no longer be rescued by the simple passing of time.
• If you want to invest in property on the Costa del Sol: European capital is moving south, and housing and tourism, the two engines the report highlights, are the backbone of the area. But it pays to run the numbers: in the province of Málaga, asking prices are up 7.4% and rents 4.5%, so gross yields are narrowing, and every municipality gives a different result.

It is also worth remembering what no forecast can guarantee. The ECB raised interest rates again in September, to 2.5%, and home sales fell by 7.7% in July, according to the INE. If more expensive financing ends up cooling the market, it will most likely show in 2027, precisely the year the forecast covers.

In short: what does the report tell us about the Costa del Sol?

Spain will be Europe's fastest-growing property market in 2026 and 2027, but it will remain small compared with Germany, France, Italy or the United Kingdom, and that headroom is part of what attracts capital. The Costa del Sol is one step ahead: its prices are higher than the national average and are growing at a more sustainable pace. If you are thinking of buying, selling or investing here, our team can help you read these figures for your municipality and your budget.

The forecasts cited are third-party estimates and do not guarantee how prices will evolve.

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