Overview on Madrid Real Estate Market

Updated: 19 December 2022

According to the global real estate consultant Knight Frank, Madrid property market has drawn a volatile graphic over the last decade. Real estate in Madrid and Spain have reached its peak before the financial crisis of 2008. Following the crisis, however, the market reached its lowest point in 2012’s third quarter. Now, Madrid real estate slowly regains its power and stands 46 per cent above the market low in 2012.

Madrid is Transformed into a Major Business Center

Since 2016, Madrid luxury real estate market performed a growth of 8.1 per cent, outperforming many other popular cities in real estate indexes. In Madrid, the upturn in the commercial sector was a precursor to the residential market’s recovery. Madrid has evolved into a key business centre with a strong finance, tech, logistics and communications bias. According to the Ministry of Economy, six out of every €10 invested in Spain is invested in the capital.

Madrid Attracts Many Tourists Around the World

Madrid is also now firmly on the tourist map with over 6.7 million tourists visiting the city in 2017. Madrid Barajas Airport operates direct flights to 203 airports globally, and passenger numbers have surged 50% since 2004, from 38 million to 57 million in 2018.

Property Market in Madrid is Competitive

Despite its popularity both as a business hub and a tourist destination, property prices in Madrid are highly competitive compared with other important cities in Europe. With €8,000 per sq. m, it is very much possible to step on a gold mine in the Spanish capital. Around 65% of prime buyers of Madrid real estate originate from within Spain, either from within Madrid or from its major cities including Barcelona, Malaga and Seville. A decade ago, this figure would have been closer to 90%. So, it is evident that foreign investment in Madrid real estate market is on the rise.

In terms of buyer motives, around 50% of our prime buyers are seeking a permanent or second home exclusively for their own personal use, 22% are looking purely for a rental investment and the remaining 28% cite a mix of reasons; holiday home, rental investment and a base for their child whilst at university.

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