Analysis · July 2026

Spain is closing in on Italy, and it shows up here

Spain grew 0.7% in the second quarter; Italy managed 0.2%. Behind those two decimal points sits a convergence story that, if construction keeps up and the high-speed line arrives, will translate into something very concrete for the Levante Almeriense property market: Garrucha, Vera, Mojácar and Pulpí.

ZAR 2010 · Garrucha, Almería · Reading time: 9 minutes

On 30 July 2026 something happened that never made the front pages, but which says far more about the next ten years than most of what did. Spain’s national statistics office and its Italian counterpart published their second-quarter GDP flash estimates on the same day. Spain grew 0.7% on the previous quarter, a tenth of a point faster than between January and March, with year-on-year growth of 2.7%. Italy grew 0.2%, with 1.0% year-on-year. The euro area as a whole managed 0.4%.

This is not an isolated figure or a single good quarter. Spanish GDP has now recorded twenty-four consecutive quarters of positive quarter-on-quarter growth and twenty-one quarters of year-on-year gains. With the first half of the year closed, growth already banked for 2026 — what the economy would deliver even if the second half were completely flat — stands at 2.2%. Italy, on the same date, had 0.8% banked.

Repeat that gap year after year and it eventually shifts something that looked immovable.

Four points apart

The measure Eurostat uses to track real convergence between countries is not total GDP but GDP per capita in purchasing power standards, which strips out price differences between one country and another. With the EU-27 average set at 100, in 2025 Germany stood at 115, France at 98, Italy at 96 and Spain at 92.

Four points. Three years ago it was eleven. Spain came from 86 in 2022, moved to 89 in 2023, 91 in 2024 and 92 in 2025. Italy, meanwhile, has barely shifted: 97 in 2022, 97 in 2023, 96 in 2025. One climbs slowly but without stopping; the other has spent well over a decade standing still.

The chart makes one thing plain, and it is worth saying clearly: the crossover year is extraordinarily sensitive to the assumption you choose. Using the per capita growth gap implied by the second-quarter figures themselves — around nine tenths of a point — the overtake would land around 2030. On a more cautious assumption, with Spain easing towards 1.8% and the gap narrowing, it slides to the middle of the 2030s. Anyone promising you an exact date is selling you something.

A detail almost nobody mentions

You will often read that Spain has never overtaken Italy in income per head. That is not quite accurate, and it is worth being precise about. On the data available at the time, Spain did move ahead of Italy in GDP per capita at purchasing power parity between 2006 and 2008; the government of the day announced it as such. Later statistical revisions have muddied that episode, and the financial crisis wiped out the advantage within three years.

What matters, then, is not the novelty of the event but its nature. That earlier overtake rested on an unsustainable property cycle. This one rests on job creation, an expanding labour force, tourism, service exports and EU funds, with a repaired banking sector and private debt far below 2007 levels. It is a less spectacular kind of growth and a considerably harder one to break.

The point is not that Spain is overtaking Italy again. It is that this time there is no bubble underneath.

What is driving growth, and what is missing

It is worth being honest about where this growth comes from, because that is where the opportunities are. Spain is growing above all because more people are working, not because each worker produces much more. The Bank of Spain estimated that between 2022 and 2024 the direct contribution of the foreign-born population to GDP per capita growth ran between 0.4 and 0.7 percentage points a year, through demographics and employment. Hourly productivity, by contrast, has barely contributed at all.

That has one very unabstract consequence: the country is adding households far faster than it is building homes. And that is precisely the piece that does not yet fit.

Construction: the engine that has not fully started

BBVA Research’s July 2026 numbers are blunt. National statistics projections point to roughly 220,000 new households forming in 2026, while only around 153,000 homes will be started. Across the whole 2021-2027 period, new-build construction will have met just 47% of the households formed. The accumulated shortfall will reach 885,000 homes by 2027.

The sector is already responding. New-build permits will rise 10.1% in 2026 and 12.6% in 2027, taking residential construction investment to 5.7% of GDP this year and 6% next. That is a genuine improvement. It is also still not enough: to halve the shortfall, that investment would need to approach 10% of GDP by 2030.

In plain terms: construction is not yet contributing to Spanish GDP what it should, and it has several years of structural — not cyclical — growth ahead of it. This is not a speculative rebound but a precisely identified and quantified unmet demand. That is a fundamental difference from 2007 and one worth keeping in view.

Why this lands hardest in Levante Almeriense

A national macroeconomic figure does not reach everywhere equally. It arrives sooner and harder in areas that meet three conditions: unmet residential demand, exposure to international buyers, and a pending piece of infrastructure that changes journey times. Levante Almeriense meets all three.

First. Spain’s housing shortfall is concentrated in the Mediterranean provinces with the fastest population growth. Almería is one of them, and its coastal strip — Garrucha, Vera, Mojácar, Cuevas del Almanzora, Pulpí — carries an imbalance that recent new-build starts have not corrected. The developments currently being marketed in Vera Playa, San Juan de los Terreros, Antas and Villaricos are not a speculative bet; they answer demand that existed before the first foundations were poured.

Second. Our area sells a very significant share of its product to non-resident buyers: British, Belgian, Dutch, French, German and Scandinavian. When the Spanish economy is perceived as solid — and sustained convergence with Italy is exactly the kind of headline that cements that perception — those buyers’ cost of capital falls, country risk stops being an argument, and purchase decisions get brought forward. It is an indirect channel, but a very real one.

Third, and the most decisive over the medium term: high-speed rail.

The Murcia-Almería high-speed line: the variable that redraws the map

The Murcia-Almería high-speed line, part of the Mediterranean Corridor, runs 185 kilometres as a mixed line — passengers and freight — designed for 300 km/h, with €3.6 billion of committed investment. It will have high-speed stations at Murcia, Lorca, Vera and Almería, plus upgrade works at Pulpí and Vera-Almanzora.

For Levante Almeriense, the Vera-Almanzora station is the key piece. It puts the district within a journey time of Murcia, Alicante and Madrid that simply does not exist today, and turns Vera, Garrucha and Mojácar into a long-weekend destination for markets currently out of range.

We are deliberately cautious about dates. The official target has been set at 2028, but the trackbed is not finished on every section, track laying between Lorca San Diego and Vera was still awaiting tender at the end of 2025, and the Pulpí-Águilas link remains at the design stage. On that basis, our reasonable estimate is 2029 or 2030. We would rather understate and be right than repeat a timetable that has already been corrected more than once.

What this means if you are buying or selling here

It is worth bringing the macroeconomics down to ground level, because that is where decisions get made.

If you are thinking of selling

The picture described here — a persistent housing shortfall, residential investment rising from a low base, and an access infrastructure three or four years out — is not a market heading for a sharp correction. Nor is it an invitation to wait indefinitely: the rail effect gets priced in gradually rather than all at once on opening day, and a good part of that uplift is being absorbed now. The relevant question is not how much further prices will rise, but whether the timing fits your own circumstances.

If you are thinking of buying

New-build supply in the district is finite and comes with long delivery times. With permits rising but output still insufficient, well-located and well-built stock tends to be absorbed before completion. The discipline here is not to confuse scarcity with urgency: comparing carefully, checking charges and encumbrances, verifying licences and understanding exactly what you are buying all remain essential.

If you own a holiday rental

Better rail access lengthens the season more than it raises the August peak. Markets that arrive by train do not come for a fortnight in summer; they come three or four times a year, outside high season. That is a shift in pattern worth anticipating in pricing and minimum-stay strategy.

Optimism, with both feet on the ground

Spain will overtake Italy in GDP per capita. Probably not in 2028, as the more enthusiastic extrapolations suggest, and probably yes before the end of the next decade. That milestone matters less as a headline than for what it represents: an economy that has grown faster than its neighbours for six straight years, with unemployment at decade lows and none of the imbalances that sank the previous cycle.

The risks are real and recognisable. Productivity remains the structural weak point. The growth gap with Italy is already narrowing and cannot be taken for granted. Construction faces a shortage of skilled labour and material costs exposed to international trade tensions. And the high-speed line will not be here until it is here.

But the direction of travel is unambiguous. And for a district that combines a housing shortfall, international demand and a high-speed line under construction, that direction translates into something fairly concrete: the next five years are very likely to be the most decisive Levante Almeriense has seen in three decades.

At ZAR 2010 we have worked in this district for thirty years. We have seen a full cycle, euphoria and hangover included. This one does not resemble that one, and that difference is precisely why it is worth looking at closely.