Spain's Sanchez Calls Snap Election for Nov 29 Amid Housing Crisis Protests

Spanish Prime Minister Pedro Sanchez announced on Monday, October 5, a snap general election for Sunday, November 29, the earliest date the constitution allows. The vote had been due by August 2027. "We need to mobilise and win a much larger progressive majority in Parliament," Sanchez said.

The trigger was a defeat in Congress on Friday, October 2, when lawmakers rejected two emergency housing decrees aimed at protecting vulnerable tenants from eviction, by 172-178 and 166-184, with the conservative People's Party, the far-right Vox and Catalan separatists Junts voting against. The vote came amid escalating street protests over housing affordability: more than 70,000 people marched in Madrid on October 3. The government had floated reviving the decrees through Congress's Permanent Deputation, which Vox leader Santiago Abascal called a "manifest illegality".

Markets took the news calmly: Spain's benchmark IBEX index was flat after the announcement and Spanish government bonds were broadly steady, according to Reuters. The People's Party leads the polls, and a PP government dependent on Vox would bring the far right into national government for the first time since the Franco era. What to watch: polling over the eight-week campaign, Spanish bond spreads over German Bunds if a fragmented result looks likely, and housing policy proposals that could affect Spanish property developers, landlords and banks with large mortgage books.