Authored by the expert who managed and guided the team behind the Spain Property Pack
Yes, the analysis of Madrid's property market is included in our pack
Madrid's property market in January 2026 is strong but stretched, with prices at record highs and demand outpacing supply in most neighborhoods.
We constantly update this blog post to reflect the latest housing prices in Madrid and the current state of the market.
Whether you are looking for an apartment in Chamberí or a townhouse near Chamartín, understanding the market dynamics is essential before making a decision.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Madrid.
So, is now a good time?
Rather yes: if you buy selectively and avoid overpaying, January 2026 is a decent time to buy property in Madrid because supply remains tight and demand stays strong.
The strongest signal is that Madrid's housing supply is structurally constrained by slow permitting and limited land, which keeps prices from falling sharply.
Another strong signal is that mortgage rates have stabilized compared to their 2023 peaks, making financing more accessible for buyers in Madrid.
Transaction volumes remain healthy, rents are elevated (supporting landlord economics), and major infrastructure like Madrid Nuevo Norte will reshape the north of the city over the coming years.
The best investment strategies in Madrid right now include buying well-located apartments in liquid districts like Chamberí, Retiro, Chamartín, or Arganzuela, holding for at least five years, and targeting units with good natural light and elevator access.
This is not financial or investment advice, we do not know your personal situation, and you should always do your own research before making any property decision.
Is it smart to buy now in Madrid, or should I wait as of 2026?
Do real estate prices look too high in Madrid as of 2026?
As of early 2026, property prices in Madrid appear somewhat stretched compared to local incomes, with price-to-income ratios running between 7x and 10x depending on the district.
One clear sign of this is that average asking prices across Madrid have reached record levels, with valuations around 3,700 euros per square meter according to official government data.
Another signal is that while listings do receive interest quickly in popular neighborhoods, overpriced units tend to sit on the market longer, suggesting buyers are being selective despite strong demand.
You can also read our latest update regarding the housing prices in Madrid.
Does a property price drop look likely in Madrid as of 2026?
As of early 2026, the likelihood of a meaningful property price decline in Madrid over the next 12 months appears low because neither a credit squeeze nor a major recession is currently expected.
A realistic price change range for Madrid over the coming year is somewhere between flat and up 5%, though weaker micro-locations could see small declines of up to 5% if affordability becomes too stretched.
The single most important factor that could trigger a price drop in Madrid would be a sharp rise in mortgage rates, which would reduce buyer purchasing power almost immediately.
However, as of early 2026, benchmark rates have stabilized and the European Central Bank has signaled no aggressive tightening, making a sudden rate spike relatively unlikely in the near term.
Finally, please note that we cover the price trends for next year in our pack about the property market in Madrid.
Could property prices jump again in Madrid as of 2026?
As of early 2026, the likelihood of a renewed price surge in Madrid is medium, especially in prime and supply-constrained neighborhoods where demand already exceeds available listings.
A plausible upside range for Madrid property prices over the next 12 months is between 3% and 8%, with the higher end applying to renovated apartments in neighborhoods like Salamanca, Chamberí, and Retiro.
The single biggest demand-side trigger that could push prices higher in Madrid is a further decline in mortgage rates, which would unlock more buyer demand in a market that is already rate-sensitive.
Please also note that we regularly publish and update real estate price forecasts for Madrid here.
Are we in a buyer or a seller market in Madrid as of 2026?
As of early 2026, Madrid is best described as a seller-leaning market because housing supply remains structurally low while demand from local buyers and investors stays strong.
Months-of-inventory data is not published uniformly in Spain, but professional reports and registry activity suggest listings move quickly in desirable areas, which typically means sellers have the upper hand.
Price reductions do exist, but they tend to be concentrated on overpriced or less desirable units, while correctly priced apartments in good buildings often sell close to asking price within a few weeks.
Are homes overpriced, or fairly priced in Madrid as of 2026?
Are homes overpriced versus rents or versus incomes in Madrid as of 2026?
As of early 2026, Madrid homes look somewhat overpriced when measured against local incomes, though they are more fairly priced when compared to current rent levels because rents have also risen sharply.
The price-to-rent ratio in Madrid implies gross yields around 6% to 7% for a typical apartment before costs, which is reasonable compared to other major European capitals where yields are often lower.
The price-to-income multiple in Madrid runs between 7x and 10x for a typical household buying an average apartment, which is stretched compared to the 4x to 5x range often considered comfortable.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Madrid.
Are home prices above the long-term average in Madrid as of 2026?
As of early 2026, home prices in Madrid are above their long-term average when measured by affordability ratios, with official valuation data showing prices at or near record highs.
Over the past 12 months, Madrid prices have risen by an estimated 5% to 8%, which is faster than the long-run historical pace and well above pre-pandemic growth rates of around 3% to 4% per year.
In inflation-adjusted terms, Madrid prices have now surpassed the 2007 bubble peak when measured by official valuation indices, though the market dynamics are different this time due to tighter credit standards.
What local changes could move prices in Madrid as of 2026?
Are big infrastructure projects coming to Madrid as of 2026?
As of early 2026, the biggest infrastructure project with price impact potential in Madrid is Madrid Nuevo Norte, a massive urban regeneration effort in the Chamartín and Fuencarral area that will add housing, offices, and transport connections.
Early construction phases for Madrid Nuevo Norte began around late 2025 and early 2026, with full delivery expected to stretch over a decade, meaning price effects will be gradual rather than sudden for nearby neighborhoods like Las Tablas, Sanchinarro, and Valdebebas.
For the latest updates on the local projects, you can read our property market analysis about Madrid here.
Are zoning or building rules changing in Madrid as of 2026?
The most important zoning framework in Madrid remains the 1997 PGOU (General Urban Plan), which was consolidated and updated through 2025 but still limits how quickly new supply can be added in central neighborhoods.
As of early 2026, there are no sweeping zoning liberalizations on the horizon, which means supply in high-demand districts like Centro, Chamberí, Salamanca, and Retiro will stay constrained, supporting prices in those areas.
If Madrid were to relax height limits or simplify permitting in established neighborhoods, it would likely add downward pressure on prices by increasing competition among units, but this scenario is not currently expected.
Are foreign-buyer or mortgage rules changing in Madrid as of 2026?
As of early 2026, Spain's government has proposed a 100% tax on property purchases by non-EU non-resident buyers, which, if enacted, could reduce high-end investment demand and add uncertainty to the Madrid market.
This foreign-buyer tax proposal is the most discussed rule change, though it remains uncertain whether it will pass in its current form or be softened during the legislative process.
On the mortgage side, there are no major changes to loan-to-value limits or stress tests being actively considered, so financing conditions for Spanish residents and EU buyers remain stable for now.
You can also read our latest update about mortgage and interest rates in Spain.
Will it be easy to find tenants in Madrid as of 2026?
Is the renter pool growing faster than new supply in Madrid as of 2026?
As of early 2026, renter demand in Madrid is growing faster than new rental supply, which is why market rents remain elevated and landlords generally have little trouble filling units.
Madrid continues to attract young professionals, students, and domestic movers, with net in-migration and household formation consistently outpacing the number of new rental units coming to market.
New rental supply programs like Plan VIVE are adding units, but the scale remains modest compared to total demand, so the overall rental market in Madrid stays tight.
Are days-on-market for rentals falling in Madrid as of 2026?
As of early 2026, correctly priced rental units in Madrid typically find tenants within one to three weeks, and this time-to-let has remained short because of persistent demand.
In prime areas like Centro, Chamberí, Salamanca, and Retiro, well-priced apartments often rent even faster, while overpriced or less desirable units in outer districts can sit for one to two months or longer.
The main reason days-on-market stays low in Madrid is simple undersupply: there are not enough available rentals to meet demand, especially for mid-priced apartments with good transit access.
Are vacancies dropping in the best areas of Madrid as of 2026?
As of early 2026, vacancy rates in top rental neighborhoods like Salamanca, Chamberí, Retiro, Centro, and Arganzuela appear very tight, with sustained high rents suggesting effective vacancy is near historic lows.
While Spain does not publish a single official vacancy statistic for Madrid neighborhoods, the persistent rent pressure and low days-on-market in these areas are consistent with vacancy rates well below 5%.
A practical sign that these top areas are tightening first is that landlords in Salamanca and Chamberí are increasingly able to demand longer lease commitments or higher deposits, which is a shift from just two years ago.
By the way, we've written a blog article detailing what are the current rent levels in Madrid.
Am I buying into a tightening market in Madrid as of 2026?
Is for-sale inventory shrinking in Madrid as of 2026?
As of early 2026, for-sale inventory in Madrid is difficult to measure precisely, but professional reports and listing platforms suggest that available stock in prime neighborhoods remains limited compared to buyer demand.
Months-of-supply estimates vary, but the consistent message from market analysts is that desirable areas like Chamberí, Salamanca, and Retiro have inventory levels below what would be considered balanced, keeping competition among buyers strong.
One likely reason inventory is constrained is rate lock-in: owners who secured low fixed-rate mortgages in recent years are reluctant to sell and give up their favorable financing, which limits new listings.
Are homes selling faster in Madrid as of 2026?
As of early 2026, well-priced homes in Madrid's desirable neighborhoods are selling relatively quickly, with correctly priced apartments in strong districts often going under contract within a few weeks.
Year-over-year, selling times have remained stable or slightly faster in prime areas, though overpriced listings still take longer, which shows buyers are selective even in a strong market.
Are new listings slowing down in Madrid as of 2026?
As of early 2026, we estimate that new for-sale listings in Madrid are roughly flat or slightly down compared to last year, though precise data is not uniformly reported.
Seasonally, Madrid sees more listings in spring and early autumn, and the current level appears somewhat below the pre-pandemic average, which adds to the supply tightness buyers are experiencing.
The most plausible reason new listings are slow is that existing owners are hesitant to sell when they hold low-rate mortgages and face high prices if they want to buy elsewhere in Madrid.
Is new construction failing to keep up in Madrid as of 2026?
As of early 2026, new housing completions in Madrid are not keeping pace with household formation, which is a key reason why the market remains tight and prices stay elevated.
Building permits and housing starts in the Madrid region have improved compared to their post-2008 lows, but they remain well below the levels needed to fully meet demand, especially in central and well-connected areas.
The biggest bottleneck limiting new construction in Madrid is permitting and planning constraints, as the city's PGOU makes large-scale development slow and costly in established neighborhoods.
Will it be easy to sell later in Madrid as of 2026?
Is resale liquidity strong enough in Madrid as of 2026?
As of early 2026, resale liquidity in Madrid is generally strong for apartments in desirable districts, meaning correctly priced homes in good locations tend to sell within a reasonable timeframe.
Median days-on-market for resale homes in liquid areas like Salamanca, Chamberí, Retiro, and Chamartín often runs between three and six weeks, which compares favorably to a "healthy liquidity" benchmark of under 90 days.
The property characteristic that most improves resale liquidity in Madrid is a combination of good location (near metro), elevator access, and decent natural light, which are features that consistently attract buyer interest.
Is selling time getting longer in Madrid as of 2026?
As of early 2026, selling times in Madrid have remained relatively stable compared to last year, with no significant lengthening observed for well-located and correctly priced properties.
The current median days-on-market for resale homes in Madrid ranges from around three weeks in prime areas to two months or more for less desirable or overpriced listings.
The main reason selling time could lengthen in Madrid is affordability pressure: if prices rise faster than incomes, fewer buyers qualify, which can slow absorption even in a strong market.
Is it realistic to exit with profit in Madrid as of 2026?
As of early 2026, the likelihood of exiting with a profit in Madrid is medium to high if you buy selectively and hold for at least five years, though short-term flips are risky given transaction costs.
A realistic minimum holding period in Madrid to exit with profit is around five to seven years, which gives enough time for price appreciation to cover buying and selling costs.
Total round-trip costs in Madrid, including transfer tax (around 6%), notary and registry fees, agency commissions, and legal costs, typically run between 10% and 13% of the purchase price, or roughly 35,000 to 50,000 euros on a 400,000 euro apartment.
The factor that most increases profit odds in Madrid is buying below market value, which usually means targeting motivated sellers, units needing cosmetic work, or properties in good buildings that are simply priced too low due to seller urgency.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Madrid, we always rely on the strongest methodology we can and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Ministry of Transport (MITMS) | Spain's official government statistics portal for housing and transactions. | We used it as the baseline for official price levels and transaction trends. We cross-checked private indexes against its direction. |
| Banco de España (Mortgage Rates) | Spain's central bank publishing official mortgage benchmark rates. | We used it to anchor financing costs and assess how rate changes affect buyer demand. We translated rate direction into likely market impact. |
| Banco de España (Financial Stability Report) | The central bank's flagship risk assessment including housing metrics. | We used it to gauge overvaluation risk and household stress levels. We treated it as the best official lens on market risk. |
| INE (Household Income) | Spain's official statistics agency for incomes and demographics. | We used it to ground income reality in Madrid and check price-to-income claims. We focused on household income distribution. |
| INE (IRAV Rent Index) | The official rent-update mechanism under Spain's housing law. | We used it to explain rent-update rules affecting landlords. We framed how regulation can cap rent growth. |
| Eurostat (House Price Index) | The EU's official statistics office with consistent cross-country data. | We used it to benchmark Spain and Madrid against Europe. We avoided tunnel vision by checking broader trends. |
| OECD (Housing Prices) | Standardized affordability indicators used for international comparisons. | We used it to frame what overpriced means in ratio terms. We kept our affordability logic consistent with global practice. |
| OECD (Affordable Housing Database) | Documents methodology behind affordability ratios and long-run comparisons. | We used it to justify our long-term average approach. We explained ratios without needing technical econometrics. |
| Comunidad de Madrid (Housing Bulletin) | Official regional dataset referencing notarial and official sources. | We used it to triangulate market tightness and building activity. We applied it as a local lens beyond national averages. |
| Ayuntamiento de Madrid (PGOU 2025) | The city's official consolidated urban planning rulebook. | We used it to ground zoning and building constraints. We explained why supply is slow in many neighborhoods. |
| Colegio de Registradores | Registrars record actual property sales and mortgages. | We used it to anchor transaction momentum and foreign demand. We used it as a reality check against asking-price data. |
| idealista (Sales Prices) | Spain's biggest property portal with a transparent index. | We used it to measure market temperature in near-real-time. We cross-checked direction versus official sources. |
| idealista (Rental Prices) | One of Spain's most used rental-market references. | We used it to estimate current rent levels and trends. We approximated gross yields by pairing it with price data. |
| Comunidad de Madrid (Plan VIVE) | Official regional program adding affordable rental supply. | We used it to assess how much extra supply is coming. We identified where supply could ease pressure. |
| Madrid Nuevo Norte | The flagship regeneration project shaping Madrid's north. | We used it to map the biggest medium-term supply catalyst. We cross-checked timelines with business press coverage. |