As reported by Open4Business, Prime Minister Spain's Pedro Sánchez announced the dissolution of parliament and the holding of early parliamentary elections on November 29, 2026, after a divided parliament blocked a number of key government initiatives, including measures to combat the housing crisis.
On October 5, Sánchez announced the convening of an extraordinary government meeting to start the process of dissolving parliament. Early voting will take place almost a year ahead of schedule.
The decision was made after another worsening of the housing crisis in Spain. Last week, the parliament rejected the government's proposed housing measures, and on October 3, tens of thousands of people protested in about 50 cities of the country.
In Madrid alone, according to Reuters, about 70,000 people took part in the demonstration. Protesters demanded tougher measures against rising rents, evictions and a shortage of affordable housing. Actions also took place in Valencia and other major cities.
The housing problem in Spain has worsened in recent years amid rapid price increases, insufficient supply of new housing and high rental costs in the largest cities and tourist regions.
According to the latest Eurostat data published on October 1, 2026, residential property prices in Spain rose by 12.1% in the second quarter compared to the second quarter 2025 year. For comparison: on average, housing in the European Union increased in price by 4.7% during this period, and in the Eurozone by 4%. Thus, the rates of price growth in Spain are more than double the European average.
Moreover, the increase in prices continues on a quarterly basis: in the second quarter, prices in Spain increased by another 3.4% compared to the first quarter of 2026. In the first quarter, the annual growth was 12.8%.
High rates are also maintained in the secondary market. According to the indexes of the largest Spanish real estate portals published at the beginning of October, the average cost of second homes in the third quarter continued to grow at double-digit rates. According to Idealista, prices increased by 11.8% over the year — up to 2.93 thousand euros per square meter. m, while Fotocasa estimates an annual growth of 13.8% and an average price of about 3.14 thousand euros per square meter. m.
At the same time, the situation is complicated by the terms of lending. The Bank of Spain reported in July that in the second quarter of 2026, banks tightened lending conditions, and the population's demand for mortgage loans decreased. Banks also expected further tightening of lending conditions in the third quarter.
Thus, the housing issue has turned from a primarily social and economic problem into one of the central factors of the Spanish political agenda. Rapidly rising real estate prices, a shortage of affordable supply, the situation in the rental market and mass protests have increased pressure on the government at a time when Sánchez's cabinet was already struggling to pass bills in parliament.
Early parliamentary elections in Spain are scheduled for November 29, 2026.
