Why is Madrid so popular for residential investment?


Madrid, it would appear, is the perfect city to invest in within Spain. Investors can expect a high likelihood of capital gain, good rental return and obviously, an excellent lifestyle. As a result of such foreign interest, house prices are increasing in some parts of the city. However, in other areas, prices remain reasonable and represent good value for money. In this post, we have outlined some of the reasons why Madrid is so popular for investment. Along with some facts and figures that will reveal more about the current housing market in Madrid.

Why are properties so popular in Madrid?

Madrid still remains an important European property investment hub. And significantly, the number of enquiries from UK and US is significantly rising. This is 108% and 57% respectfully. And Latin American buyers account for one third of all sales through Lucas Fox. As expected though, half were Spanish buyers.

It can be revealed that 62% of buyers in Madrid purchase for investment reasons. In contrast, 38% buy homes as second residences.

Popularity of Madrid has been seen for many years. And it can be revealed that Madrid is the fourth best city for property investment in Europe. Closely followed by Hamburg, Berlin and Dublin.

Madrid is experiencing strong local and national growth with significant demand from worldwide investors. Resultantly, sales have increased nearly by a third and this is expected to increase even more by the end of the year. Reasons for this include high likelihood of capital gain, good rental return and the excellent lifestyle offered.

It is clear to see that the residential market of Madrid is experiencing significant growth. And overseas buyers are fuelling increasing house prices. In certain parts of Madrid, areas such as Salamanca and Chamberi are in high demand. And prices here have risen by up to 14%.

Nevertheless, Madrid still offers good value for money.

Looking toward the future, Madrid is subject to a different range of circumstances, compared to ten years back. For example, the construction industry represents a lower proportion of Spain’s GDP. Also risk can be better controlled, and investors, as a whole, are better informed.


If you are looking to invest in a Spanish city, you cannot go far wrong with Madrid. For investors, it is an ideal choice. Possibility for capital gain is high, return on rental is very good, and the lifestyle is cutting edge. However, house prices are increasing across the city as a result. Thankfully, by considering some areas carefully, it is still possible to find reasonably priced property in the area. In this post we have outlined why Madrid is so popular for residential investment along with some important facts and figures about the current investment picture in Madrid.

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