Large groups of investors, both Spanish and international, are redefining their strategies and redirecting their attention towards Madrid, after historically focusing their interests on the Spanish coasts, especially on the Costa del Sol and the Costa Blanca. This trend, which has gained momentum since 2024, is expected to continue in 2025 with a focus on the luxury segment and the development of iconic infrastructures in the capital.
Rafael Santana, Director of K&N Elite in Madrid, points out that “major investors are starting to diversify their projects and are setting their sights on Madrid.” Although the sale of homes in coastal areas continues to grow, with notable investment ratios, the attraction towards projects in the capital is due to its increasing positioning on the European map, where Madrid ranks second as the most attractive city for investment, surpassed only by London.
Madrid has solidified its status as a hub for real estate investment. In 2024, the real estate sector in Spain exceeded 18 billion euros in investments, of which more than 35% were concentrated in Madrid, reaffirming its position as the most dynamic market in the country.
The interest in luxury housing in the capital is significant, with over 35 active promotions in the city center. The prices of these properties range from 1.8 to 16 million euros, especially in sought-after areas like the Barrio de Salamanca and Chamberí, where 65% of high-end transactions are concentrated.
Several factors are driving this capital migration to Madrid, including market stability, which offers a solid economic environment and steady housing demand. Attractive returns in the luxury residential rental segment fluctuate between 4.5% and 6.5% annually. Additionally, there has been an 18% increase in the average price of luxury rental properties in Madrid during 2024.
The creation of infrastructures and the rehabilitation of historic buildings into high-end residences are increasing the market’s appeal. However, this increase in investment has also raised concerns about access to housing for local residents, as purchase prices in the most exclusive areas have reached 13,000 euros per square meter, compared to 7,500 euros per square meter on the Costa del Sol.
The future prospects are promising, with a continuous increase in investments expected in Madrid, particularly in the luxury sector and in mixed developments that combine residential and commercial uses. Professionalization of the sector and integration of advanced technologies will be essential to maintain the competitiveness of this emerging market.
Source: MiMub in Spanish
