Real estate in Madrid is consolidating its position as one of the main drivers of the real estate market in Spain. Across the country, real estate investment in Spain surged by 39% in the first quarter of 2025, reaching €3.3 billion, according to the latest CBRE report. This rebound reflects the strong recovery of the sector and renewed interest from both private and institutional investors in real estate in Spain.
In this context of expansion, Madrid stands out as the central hub for real estate in Spain, thanks to its economic dynamism, sustained asset appreciation, and high transaction volume. The capital has become the nerve center of investor interest, both nationally and internationally.
Real estate in Madrid: the leading market for real estate investment in Spain
Real estate in Madrid continues to grow thanks to its solid fundamentals and promising outlook. The city’s leadership as a top destination for real estate investment in Spain is backed by strong data and international recognition.
Sustained growth in residential property value
Madrid has recorded the highest year-on-year increase in price per square meter in Spain, with gains of over 24%, according to Idealista. This reflects persistent demand and a clear trend of asset appreciation, especially for high-quality properties in prime locations.
Record-breaking transaction volume
Madrid leads the country in residential property sales. According to the latest INE figures, 62,808 transactions were recorded in March, representing a 40% year-on-year increase and confirming steady growth in activity.
This high volume of operations reflects market liquidity well above the national average, reducing investor risk and supporting both entry and exit strategies.
Recognised as a strategic market in Europe
CBRE’s 2025 European Investor Intentions Survey ranks Madrid as the second most attractive city in Europe for real estate investment, just behind London. This international ranking underscores the strong institutional confidence in Madrid’s market compared to other more traditional European capitals.
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Key drivers of real estate investment in Madrid
1. Economic and political stability
Madrid offers a safe and predictable environment for capital, enabling long-term investments even amid global uncertainty.
2. Strong residential and commercial demand
Driven by population growth, internationalisation, and robust economic activity, demand continues to outpace supply—and shows no signs of slowing.
3. Strategic urban development
Large-scale projects such as Madrid Nuevo Norte are transforming the city’s landscape, attracting domestic and foreign investment while improving infrastructure and services.
Buy an apartment in Madrid to renovate: a high-return strategy
Buy an apartment in Madrid to renovate remains one of the most profitable approaches in the current market. One of the strongest opportunities lies in refurbishing properties in prime areas. With limited new supply and growing demand—especially for homes renovated to high standards—this segment is now one of the most sought-after in the Madrid real estate market.
Medium-sized, well-renovated units are especially in demand. For investors, this presents a solid strategy: acquire underutilised properties in prime areas, enhance their value through full renovations, and reposition them for sale or rent with high appeal.
Madrid’s current legal framework, combined with tax incentives for renovation, makes this model an efficient and profitable way to generate value in the short to medium term.
To illustrate this strategy, you can explore our real estate investment in Madrid success story, which shows how a well-planned renovation delivered a return of over 22%. This approach falls under the value-add category—investments that aim to increase property value through targeted improvements.
Best areas for real estate investment in Madrid
Real estate investment in Madrid is especially attractive in neighborhoods with strong demand and appreciation potential. Madrid’s prime real estate areas remain highly liquid and secure assets. Among the top districts are Salamanca and Retiro—luxury real estate hubs with exceptional price stability and appreciation, showing increases of over 25%.
Also notable are Chamberí and Chamartín, with value gains of 16% and 22% respectively. These areas are characterised by low turnover, high owner-occupancy, and steadily increasing prices per square meter.
That’s why investing in an apartment in Madrid for renovation is a high-liquidity strategy, particularly for resale.
Frequently asked questions about real estate in Madrid
Is it a good idea to invest in real estate in Madrid?
Yes. Madrid leads the Spanish real estate market thanks to its stability, strong demand, and consistent asset appreciation—particularly in prime neighborhoods.
What´s the return on buying a flat to renovate in Madrid?
It depends on the area and the property’s initial condition, but well-managed projects can exceed 20% returns—especially when focused on mid-sized properties with quality finishes.
Which is the best neighborhood to invest in Madrid?
Districts like Salamanca, Retiro, Chamberí, and Chamartín are well established as prime areas, with growing demand and long-term value appreciation above 20%.
Is Madrid a good option for international investors?
Yes. According to CBRE, Madrid is the second most attractive city in Europe for real estate investment, ahead of many traditional capitals.
Which type of property yields the highest returns?
The most profitable properties are typically located in prime areas, where buyer demand is high, infrastructure is excellent, and appreciation potential is strong.
Conclusion: why real estate in Madrid remains a strategic investment in 2025
With sustained value growth, solid demand backed by structural fundamentals, and recognition as one of Europe’s most attractive destinations, real estate in Madrid remains in a privileged position in the property investment landscape.
The combination of macroeconomic stability, large-scale urban projects, and strong opportunities in the renovation segment makes Madrid a promising market for medium- and long-term returns.
Choosing real estate investment in Madrid in 2025 is not only backed by data—it’s a forward-looking decision aligned with market momentum.
Want to explore high-yield opportunities in Madrid? Check out our exclusive projects.
