Investing in housing in Madrid: is it a good idea?

A booming real estate market

Madrid's real estate market is experiencing a sustained boom , driven by constant demand for housing from both national and international residents. In the last two years, the number of real estate transactions has registered an average annual growth of 30% , according to data from the Ministry of Development.
Rising Prices

Housing prices in Madrid have experienced constant growth in recent years. According to data from the INE, in the last year the average price has increased by 6.7% , reaching an average of €3,741/m2 .

Market Driving Factors

Various factors contribute to the strength of the Madrid real estate market:

·         High demand: The city attracts talent from various sectors, driving demand for housing.

·         Limited supply: Scarcity of land available for new construction keeps prices high

·         Robust economy: Low unemployment and a high level of per capita income increase purchasing power.

·         Tourist attraction: Madrid is a popular tourist destination , generating demand for rentals and second homes.

But is investing in housing in Madrid a good idea?

Yes, investing in housing in Madrid can be a good idea if you are looking for:

·         A long-term investment: Housing in Madrid has demonstrated constant long-term growth. According to data from the General Council of Notaries and the National Institute of Statistics (INE), the price of housing in the Spanish capital has experienced an average increase of 68% between 2014 and 2024.

·         Passive income: Renting your home can generate regular income , since the rental price in Madrid has experienced a notable increase in the last 10 years. According to data from the National Institute of Statistics (INE) , between 2014 and 2023 the Rental Housing Price Index (IPVI) for the city of Madrid has registered a cumulative increase of 77.7% .

However, it is important to consider:

·         Market Risks: Home prices may fluctuate and decline in the future.

·         Initial investment: Significant capital is required to purchase the home and face associated expenses.

·         Lack of liquidity: The home cannot be sold immediately if the money is needed.

At Engel & Völkers we can help you throughout the entire process of buying a home in Madrid and guide you so that you can make the best decision. We have expert real estate consultants who will provide you with the best personalized advice.

For more information about the Madrid real estate market, visit our website or contact us.

https://www.engelvoelkers.com/en-es/madrid/