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
What do the latest numbers reveal about Madrid’s real estate market? Are property prices on the rise, or are they stabilizing? Which neighborhoods offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Madrid, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
How this content was created 🔎📝
1) Madrid's residential property vacancy rate is about 4%
The vacancy rate for residential properties in Madrid is currently around 4%.
Housing prices in Madrid have been climbing, with a 17.5% increase in 2024 and expected to rise another 4% to 5% in 2025. This surge shows a strong demand for housing, which helps keep the vacancy rate low.
The Community of Madrid plans to introduce 3,000 new affordable rental homes by mid-2025. While this aims to meet the high demand, the current limited supply maintains the low vacancy rate until these homes are ready.
Madrid's allure as a tourist hotspot, with 14.3 million overnight stays in 2019, adds to the housing demand. Many properties are used for short-term rentals, further tightening the market and contributing to the low vacancy rate.
Sources: Comunidad de Madrid, Madrid Destino, El Diario
2) The average kitchen remodel in Madrid costs about €10,000
In Madrid, the average cost of a kitchen remodel is about €10,000.
This price is largely influenced by the size of the kitchen. For instance, a medium-sized kitchen, roughly 10 square meters, is quite typical in Madrid. This makes the €10,000 estimate applicable to many homeowners in the city.
When you consider a remodel, the cost covers several key components. It includes demolition, new flooring, walls, electrical and plumbing work, and appliances. These are standard parts of any kitchen renovation, which helps explain why the average cost hovers around €10,000.
In Madrid, kitchens of this size are common, so the €10,000 figure is not just a random number. It reflects the realities of remodeling in the city, where these elements are essential for a complete renovation.
Homeowners should be aware that these costs can vary slightly based on specific choices and materials. However, the €10,000 average remains a solid benchmark for planning purposes.
Sources: Cubicup, Acierto.com
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Property management fees in Madrid average about 10% of rental income
In Madrid, property management fees average about 10% of rental income.
This fee covers a variety of services, such as advertising the property and finding tenants. Agencies also handle contract drafting and landlord-tenant mediation, which require both time and expertise. These tasks are essential for smooth property management, justifying the cost.
Back in 2023 and 2024, fees typically ranged from 8% to 15% of annual rental income. This percentage-based model aligns the agency's success with the landlord's, making it a popular choice. Fees can vary based on the agency and the property's location, with high-demand areas often seeing higher charges.
The type of property also plays a role in determining costs. For instance, managing an apartment might be cheaper than a single-family home due to different maintenance needs. This variability reflects the diverse needs of property owners and the tailored services agencies offer.
Understanding these factors can help potential buyers make informed decisions. Whether you're looking at a bustling neighborhood or a quieter area, knowing the fee structure is crucial.
Sources: Nester Software, Housfy, Real Advisor
4) In 2025, city center properties in Madrid are priced at least 20% higher than suburban ones
In 2025, properties in the city center of Madrid are priced at least 20% higher than those in the suburbs.
Madrid's property market is booming, with city center prices hitting record highs. Previously, the city center averaged around 3,771 euros per square meter, while areas like Villaverde in the suburbs were more affordable at 2,252 euros per square meter.
In districts such as Salamanca, prices for second-hand properties range from 6,219 to 8,818 euros per square meter, showing a strong demand for central locations. This demand naturally pushes prices up.
Even though the overall housing market in Madrid is on the rise, there's been a slight slowdown due to recent decreases in interest rates and the euribor. However, this hasn't really impacted the premium on city center properties.
For those considering a move, it's important to note that the allure of city living continues to drive up prices, making central Madrid a hot spot for buyers.
While suburban areas offer more affordable options, the vibrant lifestyle and amenities of the city center keep it in high demand, maintaining its price advantage.
Sources: eldiario.es, Time Out Madrid, Housfy Blog
5) New residential construction projects in Madrid increased by 15% in 2024
In 2024, new residential construction projects in Madrid increased by 15%.
This surge is part of a broader trend in Spain's construction industry, especially in Madrid. The sector was on an upswing, with many new projects focusing on residential buildings. In 2024, municipalities authorized around 110,000 new housing units, marking a significant rise from the previous year.
Back in 2023, there were 14,362 licenses requested for new construction projects. By 2024, this number had grown considerably, reflecting the overall expansion in the construction sector.
Although the specific details of the 15% increase in Madrid aren't fully outlined, the general trend shows a notable rise in construction activities. This growth has been a key factor in the uptick of residential projects.
For potential property buyers, this means more options and opportunities in the Madrid real estate market. The increase in construction projects could lead to a wider variety of housing choices and potentially more competitive pricing.
As the construction industry continues to thrive, Madrid remains a focal point for new residential developments, attracting both local and international investors.
Source: Aserta
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6) Co-living spaces in Madrid have increased by 20% since 2024
The number of co-living spaces in Madrid has grown by 20% since 2024.
Madrid's vibrant cultural scene and excellent connectivity make it a magnet for those seeking flexible living. The city's energy and accessibility attract individuals who value community and convenience, which are the heart of co-living.
Supportive institutional policies have played a big role in this growth. These policies have encouraged investment and innovation in alternative housing models like co-living, making it easier for developers to create spaces that blend modern amenities with shared workspaces.
These co-living spaces often feature green areas and social events, appealing to a wide range of residents. The combination of modern living and community-focused environments is a big draw for many.
Developers are keen to tap into this trend, creating spaces that offer shared workspaces and modern amenities. This approach not only meets the needs of residents but also aligns with the city's push for innovative housing solutions.
Madrid's co-living boom is a testament to the city's ability to adapt and thrive, offering flexible and community-oriented living options that cater to modern lifestyles.
Source: Tripatia.es
7) By 2025, around 25% of Madrid's homes will have smart home technology
In 2025, about 25% of Madrid's residential properties are equipped with smart home technology.
Across Spain, smart home technology is becoming increasingly popular, with 3.8 million homes expected to be intelligent by 2025, making up about 21% of the country's total housing stock. This national trend highlights a growing interest in smart home features.
The smart home market in Spain is on the rise, projected to hit €13.3 billion by 2030. This growth suggests that more people are investing in these technologies, which likely boosts the number of smart homes in Madrid, even if specific data for the city isn't available.
Regions like the Región de Murcia, Baleares, and Andalucía are leading the way, with over 55% of households already using smart devices. This high adoption rate in other areas indicates that Madrid, as a major urban hub, is likely to see similar trends.
In Madrid, the shift towards smart homes is part of a broader movement seen across Spain. As more people embrace these technologies, the capital is expected to follow suit, aligning with the national trend.
With the smart home market expanding rapidly, major cities like Madrid are poised to become key players in this technological evolution, reflecting the broader changes happening throughout the country.
Sources: IT Reseller, The Singular Space, Innovando en la Construcción
8) By 2025, a two-bedroom apartment in Madrid will rent for €1,200 per month
In 2025, the average rental price for a two-bedroom apartment in Madrid is €1,200 per month.
Madrid's rental market is quite dynamic, with prices varying based on location and amenities. In 2024, the cost per square meter in different districts ranged from €4,000 to €8,000. This means some neighborhoods are pricier, while others are more budget-friendly, balancing out to an average rent of €1,200.
Economic factors like interest rates and the Euribor rate also play a role in shaping rental prices. While prices aren't expected to drop, their growth is predicted to slow down. This gradual slowdown helps keep the average rent stable.
New legislation coming into effect in January 2025 will limit annual rent increases to the Consumer Price Index (IPC) or less. This law is designed to control rent hikes, ensuring they don't skyrocket and helping to maintain the average rent around €1,200.
These factors combined create a rental market where prices are kept in check, making it a bit easier for potential renters to plan their budgets. The controlled growth and legislative measures provide a sense of stability in an otherwise fluctuating market.
For anyone considering a move to Madrid, understanding these elements can help in making informed decisions about where to live and what to expect in terms of rental costs.
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) By 2025, international investors will make up about 30% of property buyers in Madrid
In 2025, about 30% of property buyers in Madrid are international investors.
Madrid's allure for international investors has grown, with many coming from Latin America and the United States. This is largely due to the city's high rental yields and favorable market conditions, making it a hotspot for those seeking profitable ventures.
The luxury real estate market in Madrid is booming, with over 30 projects reshaping the city center. Property prices vary widely, from €1 million for a cozy one-bedroom apartment to a staggering €13 million for a lavish penthouse, attracting foreign nationals eager for lucrative investments.
Back in 2024, around 7% of properties in Madrid were snapped up by international buyers. This figure highlights the significant presence of foreign investors, and with Madrid's real estate market continuing to thrive, it's no surprise that this percentage has likely surged by 2025.
Madrid's transformation into a real estate magnet is evident, with its vibrant market drawing attention from across the globe. The city's appeal is not just in its properties but also in the potential for substantial returns, making it a prime choice for international investors.
As the city continues to evolve, the influx of international buyers is expected to keep rising, further cementing Madrid's status as a top destination for real estate investment.
Sources: Global Fashion Export, Promora, La Vanguardia
10) Madrid's average household size is now 2.5 people
In Madrid, the average household size is now 2.5 people.
This reflects a broader trend across Spain, where household sizes have been shrinking over the years. According to the Instituto Nacional de Estadística (INE), the average household size in Spain was 2.54 people in 2021, and it's expected to keep decreasing. This shift is part of a larger demographic change, with more people opting for smaller family units or living alone.
In Madrid, this trend is particularly noticeable. The INE projects that the number of households in the city will reach 3.2 million by 2039. This increase in households comes with a decrease in average household size, mirroring the national pattern of smaller living arrangements.
While specific figures for Madrid in 2023 or 2024 aren't available, the overall trend in Spain gives us a good estimate. The average household size in Madrid is likely around 2.5 people, considering the ongoing decrease in household sizes and demographic shifts in the region.
These changes are driven by various factors, including economic conditions, lifestyle choices, and an aging population. More people are choosing to live independently or in smaller family units, contributing to the decline in household size.
Understanding these trends is crucial for anyone considering buying property in Madrid. It highlights the growing demand for smaller living spaces and the potential for increased housing development to accommodate the rising number of households.
11) By 2025, around 40% of Madrid's homes will be rented instead of owned
In 2025, around 40% of Madrid's homes are rented instead of owned.
This trend is largely due to the rising demand for rentals in bustling cities like Madrid. Buying a home has become a challenge for many, pushing them towards renting as a more practical choice. The rental market is booming, offering a feasible long-term solution for those who find homeownership out of reach.
Adding to this shift, the Instituto Nacional de Estadística (INE) introduced a new rent control index. This index is designed to keep rental prices stable, making renting more appealing and affordable. By limiting how much rents can increase, authorities have made renting a more predictable and stable option for many residents.
Traditionally, a large number of Spaniards owned their homes, but in urban areas like Madrid, renting is becoming the norm. Economic and lifestyle changes are driving this shift, with many, especially younger generations, valuing mobility and flexibility over owning property.
For these younger folks, renting offers the freedom to move and adapt to new opportunities without the long-term commitment of owning a home. This flexibility is increasingly important in a fast-paced world where job changes and relocations are common.
In summary, the combination of economic factors and lifestyle preferences is reshaping the housing landscape in Madrid. Renting is no longer just a temporary solution but a preferred choice for many, reflecting broader changes in how people live and work.
Sources: Wise, Inmobiliaria Tu Zona, 20 Minutos
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.