According to Savills latest research, Southern Europe is expected to expand faster than the EU average, supporting real estate occupier demand and investor sentiment. For 2026, Oxford Economics forecasts a GDP growth of 2.4% for Spain, 2.1% for Portugal and 1.8% for Greece, compared with an average 1.0% for the EU27.
In 2025, Spain, Italy, Portugal and Greece saw real estate transaction volumes of €35 billion, an all-time high and 24% above 2024 levels. The region’s recent outperformance is increasingly underpinned by structural factors: a deepening investable universe, sustained tourism-led demand, lower e-commerce exposure in retail, and office and logistics dynamics that look more favourable than in several core markets, says Savills.
Energy is an additional differentiator in a more volatile geopolitical backdrop, according to the international real estate advisor. Higher domestic renewable penetration should help dampen exposure to imported energy shocks and improve operating-cost visibility for occupiers, supporting leasing decisions and business confidence in energy-sensitive sectors.
James Burke, Director, Global Cross Border Investment at Savills says: “After an exceptionally strong 2025, we expect momentum in the region to continue this year, albeit at a more moderate pace. Investors aren’t just chasing a bounce in the South, they’re underwriting a cleaner demand story and a deeper opportunity set as the Mediterranean shifts from ‘satellite allocation’ to ‘strategic exposure’ in European portfolios.”
Jaime Pascual-Sanchiz, CEO Savills Iberia and Head of Southern Europe, says: “Southern Europe has gained significant market share and sits firmly on cross-border investors’ radar. The region has benefited from a growing, more liquid universe of living sector assets such as care homes, senior housing, and student accommodation, alongside strong hospitality fundamentals underpinned by sustained tourism demand.”