All sources have been thoroughly verified for credibility. Furthermore, an industry specialist has reviewed and approved the final article.
Yes, the analysis of Madrid's property market is included in our pack
Thinking about buying a 3-bedroom apartment in Malasaña? It’s a vibrant area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other barrios like Salamanca or Chamberí where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Spain Property Pack.
Will property prices increase in Madrid in 2025?
Yes, property prices in Madrid are expected to rise in 2025, driven by a combination of high demand and a limited supply of housing.
Backed by our fresh, in-depth market analysis, we’re confident that Madrid remains one of the hottest cities globally for both domestic and international investors.
Sure, there are some economic bumps like inflation and rising interest rates, but the main drivers behind Madrid’s price growth aren’t going anywhere.
Demand, especially in the prime central areas, still outstrips supply by a mile, making any major price dips a long shot. And let’s not forget—Madrid’s status as a cultural, financial, and political hub keeps drawing in buyers from around the world.
Signals pointing to a property price increase in Madrid
Here are some factors suggesting prices could increase:
The shortage of housing construction permits expected in 2025 means fewer new developments will hit the market, particularly in highly sought-after areas. With demand remaining steady, this continued lack of supply will likely push up prices, especially in the city’s central districts.
A series of large infrastructure projects, including expansions to the Madrid Metro and improvements to road networks, are set to enhance connectivity and accessibility. These upgrades are expected to increase property values, particularly in suburban areas benefiting from better access to the city center.
Government incentives for sustainable and energy-efficient housing are expected to gain traction in 2025, leading to a wave of renovations in older Madrid buildings. Properties that undergo these improvements will likely see their market value rise, pushing overall property prices higher.
Despite economic concerns, interest rates in Spain are expected to stabilize in 2025 after recent increases, making it easier for buyers to secure loans. As more buyers regain purchasing power, demand is likely to strengthen, driving property prices upward.
Madrid is experiencing a growing trend of digital nomads and remote workers moving into the city, especially in 2025, as global work flexibility increases. This shift is expected to bolster demand for mid-range properties, particularly in vibrant and affordable neighborhoods, which could lead to higher prices in these areas.
The influx of international investors looking for stable and profitable real estate opportunities is expected to continue in 2025, further driving demand and pushing up property prices in Madrid.
The cultural and economic appeal of Madrid, combined with its status as a major European capital, continues to attract both domestic and international buyers, maintaining strong demand for properties in the city.
Signals pointing to a property price decrease in Madrid
Here are some factors suggesting prices could fall:
Rising inflation and living costs are squeezing household budgets across Spain, and Madrid is no exception. As essential goods and services become more expensive, middle-income buyers, especially first-time homebuyers, may be priced out of the market, which could reduce demand for lower and mid-tier properties.
Higher mortgage interest rates, which have risen sharply from the ultra-low levels seen in recent years, are making it increasingly difficult for buyers to secure affordable financing. This particularly impacts those looking to purchase second homes or investment properties, potentially cooling off demand in the broader market outside of the luxury segment.
Economic uncertainties, including potential political instability or global economic downturns, could impact buyer confidence and reduce demand for properties in Madrid, leading to a potential slowdown in price growth.
Get fresh and reliable information about the market in Spain
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
If property prices go up in Madrid, how much would they increase by?
If real estate prices in Madrid were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in dynamic markets like Madrid appreciates by approximately 3% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom apartment in Malasaña for 400,000 euros today, don't be surprised if it's priced between 412,000 and 428,000 euros this time next year.
To give you a better understanding, here is a table that shows 7 types of Madrid real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 3%, 5%, and 7%.
| Type of Property | Average Price in 2024 (€) | Price in 2025 (3% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Classic Apartment (60 sqm / 646 sqft) | €300,000 | €309,000 | €315,000 | €321,000 |
| Modern Apartment (75 sqm / 807 sqft) | €450,000 | €463,500 | €472,500 | €481,500 |
| Luxury Penthouse (100 sqm / 1,076 sqft) | €1,000,000 | €1,030,000 | €1,050,000 | €1,070,000 |
| Studio (30 sqm / 323 sqft) | €200,000 | €206,000 | €210,000 | €214,000 |
| Loft (80 sqm / 861 sqft) | €500,000 | €515,000 | €525,000 | €535,000 |
| Townhouse (150 sqm / 1,615 sqft) | €800,000 | €824,000 | €840,000 | €856,000 |
| Investment Property (50 sqm / 538 sqft) | €350,000 | €360,500 | €367,500 | €374,500 |
Everything you need to know is included in our Property Pack for Madrid
If real estate prices go up in Madrid, which areas are likely to see the biggest increases?
Today, people who want to move to Madrid want the charm, but they also want modern conveniences and vibrant social scenes, which Malasaña delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Lavapiés has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Madrid market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Malasaña | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Salamanca | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Madrid. |
| Chamberí | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| AZCA | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Retiro | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| La Latina | Medium | Investment in local infrastructure, such as the extension of metro lines and renovation of historic areas, is boosting long-term value. |
| Chueca | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Lavapiés | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Pozuelo de Alarcón | Medium-High | Its proximity to Madrid, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Tetuán | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Chamartín | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Centro | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this central, historic location. |
-The best areas to buy a property in Madrid
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation?
In 2025, Madrid real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near Madrid are seeing increased interest. Proximity to green spaces and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In dense cities like Madrid, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Madrid's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the city’s green goals, leading to price appreciation in this category.
Make a profitable investment in Spain
Better information leads to better decisions. Save time and money. Download our guide.
