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
The Madrid real estate market in early 2026 is showing strong momentum, with property prices around 5,800 euros per square meter citywide and rents near 23 euros per square meter per month.
This guide breaks down every district and neighborhood so you can see where yields are highest, which areas are gentrifying, and which ones to approach with caution.
We constantly update this blog post to reflect the latest market conditions and regulatory changes affecting property buyers in Madrid.
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.
What's the Current Real Estate Market Situation by Area in Madrid?
Which areas in Madrid have the highest property prices per square meter in 2026?
As of early 2026, the three most expensive areas for property in Madrid are Salamanca (around 9,950 euros per square meter), Chamberi (around 8,800 euros per square meter), and Chamartin (around 7,800 euros per square meter).
In these premium Madrid districts, typical prices range from 7,500 to 10,000 euros per square meter for standard apartments, though ultra-luxury new builds in places like Recoletos or El Viso can reach 25,000 to 27,000 euros per square meter.
Each of these expensive Madrid neighborhoods commands high prices for different reasons:
- Recoletos and Castellana (Salamanca): Historic architecture, "Golden Mile" luxury retail, and proximity to Retiro Park.
- Almagro and Trafalgar (Chamberi): Classic Madrid charm, excellent schools, and walkable streets with local boutiques.
- El Viso and Hispanoamerica (Chamartin): Large family homes, international schools, and direct access to the business district.
- Jeronimos and Ibiza (Retiro): Museum proximity, park access, and quiet residential streets near the city center.
Which areas in Madrid have the most affordable property prices in 2026?
As of early 2026, the most affordable districts in Madrid for property buyers are Villaverde (around 2,750 euros per square meter), Puente de Vallecas (around 3,200 euros per square meter), Usera (around 3,350 euros per square meter), and Carabanchel (around 3,550 euros per square meter).
In these lower-priced Madrid neighborhoods, you can expect to pay between 2,700 and 3,800 euros per square meter, which means a 60-square-meter apartment would cost roughly 160,000 to 230,000 euros.
The main trade-offs in these affordable Madrid areas include older building stock that may need renovation in Villaverde, higher tenant turnover and street-by-street quality variation in Puente de Vallecas, a steeper learning curve on micro-location in Usera where some blocks are excellent while others are not, and longer commute times to the business district from outer Carabanchel.
You can also read our latest analysis regarding housing prices in Madrid.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Spain. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
Which Areas in Madrid Offer the Best Rental Yields?
Which neighborhoods in Madrid have the highest gross rental yields in 2026?
As of early 2026, the Madrid neighborhoods with the highest gross rental yields are Puente de Vallecas (around 7.1%), Villaverde (around 7.0%), Usera (around 6.7%), and Carabanchel (around 6.0%).
Across Madrid as a whole, typical gross rental yields range from 3.3% in premium districts like Salamanca to 7.1% in more affordable outer areas, with the citywide average sitting around 4.7%.
Here is why these high-yield Madrid neighborhoods deliver stronger returns than other areas:
- Numancia and San Diego (Puente de Vallecas): Low purchase prices combined with steady demand from working-class tenants.
- Villaverde Alto and San Cristobal (Villaverde): Entry prices under 2,800 euros per square meter with rents that have risen faster than prices.
- Moscardo and Almendrales (Usera): Growing immigrant community and improved metro connections boosting rental demand.
- Vista Alegre and Opanel (Carabanchel): Affordable rents attracting young professionals priced out of central Madrid.
Finally, please note that we cover the rental yields in Madrid here.
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Which Areas in Madrid Are Best for Short-Term Vacation Rentals?
Which neighborhoods in Madrid perform best on Airbnb in 2026?
As of early 2026, the Madrid neighborhoods that perform best on Airbnb are Sol and Cortes in Centro district (occupancy around 83%, nightly rates around 109 euros), Justicia in Chueca (strong demand from LGBTQ+ travelers), Universidad in Malasana (popular with younger tourists), and Jeronimos near Retiro (museum and park visitors).
Top-performing Airbnb properties in central Madrid neighborhoods typically generate between 1,800 and 2,400 euros per month for a one-bedroom apartment, though two-bedroom units in prime locations can reach 3,500 euros monthly during peak season.
Each of these Madrid neighborhoods attracts short-term rental guests for specific reasons:
- Sol and Cortes (Centro): Walking distance to Puerta del Sol, Plaza Mayor, and the main tourist attractions.
- Justicia (Chueca): Vibrant nightlife, trendy restaurants, and a welcoming atmosphere for international visitors.
- Universidad (Malasana): Bohemian cafes, vintage shops, and an authentic Madrid neighborhood experience.
- Jeronimos (Retiro): Direct access to Prado Museum, Reina Sofia, and Retiro Park greenery.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Madrid.
Which tourist areas in Madrid are becoming oversaturated with short-term rentals?
The three Madrid areas most oversaturated with short-term rentals are Sol, Cortes (Barrio de las Letras), and Universidad (Malasana), all within the Centro district where tourist apartments represent about 42% of all short-term accommodations in the city.
In these oversaturated Madrid neighborhoods, there are approximately 6,750 tourist rental units offering over 25,000 beds, though recent enforcement has reduced total city listings from around 17,000 in July 2025 to about 14,300 by November 2025.
The clearest sign of oversaturation in these Madrid areas is not just listing density but the regulatory crackdown: the Plan RESIDE now bans new tourist flats in residential buildings throughout the historic center, and the national consumer ministry identified over 15,000 unlicensed tourist flats in Madrid, signaling that enforcement risk is highest exactly where supply is thickest.
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.
Which Areas in Madrid Are Best for Long-Term Rentals?
Which neighborhoods in Madrid have the strongest demand for long-term tenants?
The Madrid neighborhoods with the strongest demand for long-term tenants are Cuatro Caminos and Castillejos in Tetuan, Delicias and Legazpi in Arganzuela, Ventas and Pueblo Nuevo in Ciudad Lineal, and parts of Chamberi like Trafalgar.
In these high-demand Madrid rental neighborhoods, well-priced apartments typically rent within two to three weeks of listing, and vacancy rates remain very low because rental supply has not kept pace with population growth and household formation.
Each of these Madrid neighborhoods attracts a different tenant profile:
- Cuatro Caminos (Tetuan): Young professionals working in the nearby Azca business district.
- Delicias and Legazpi (Arganzuela): Expats and remote workers drawn to the Matadero cultural hub.
- Ventas (Ciudad Lineal): Families seeking space and metro access at lower rents than central districts.
- Trafalgar (Chamberi): Established professionals and couples who value classic Madrid architecture.
The common thread across these strong rental demand areas in Madrid is excellent metro connectivity, which lets tenants reach major employment centers within 20 to 30 minutes.
Finally, please note that we provide a very granular rental analysis in our property pack about Madrid.
What are the average long-term monthly rents by neighborhood in Madrid in 2026?
As of early 2026, average long-term monthly rents in Madrid range from about 16 euros per square meter in Villaverde to around 28 euros per square meter in Salamanca, meaning a 60-square-meter apartment costs roughly 960 euros monthly in affordable areas and 1,680 euros in premium districts.
In the most affordable Madrid neighborhoods like Villaverde, Puente de Vallecas, and Carabanchel, a one-bedroom apartment of 45 to 50 square meters typically rents for 700 to 900 euros per month.
In mid-range Madrid neighborhoods like Tetuan, Arganzuela, and Ciudad Lineal, a similar one-bedroom apartment typically costs 1,000 to 1,300 euros per month.
In the most expensive Madrid neighborhoods like Salamanca, Centro, and Chamberi, one-bedroom apartments commonly rent for 1,400 to 1,800 euros per month, with larger two-bedroom units reaching 2,200 euros or more.
You may want to check our latest analysis about the rents in Madrid here.
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Which Are the Up-and-Coming Areas to Invest in Madrid?
Which neighborhoods in Madrid are gentrifying and attracting new investors in 2026?
As of early 2026, the Madrid neighborhoods attracting the most investor attention due to gentrification are Cuatro Caminos and Valdeacederas in Tetuan, Delicias and Legazpi in Arganzuela, and Comillas and Opanel in Carabanchel.
These gentrifying Madrid neighborhoods have experienced annual price appreciation of 8% to 12% over the past two years, outpacing the city average as younger buyers and investors seek better value than fully priced central districts.
Which areas in Madrid have major infrastructure projects planned that will boost prices?
The Madrid areas most likely to see price increases from infrastructure projects are Chamartin and Fuencarral-El Pardo (due to Madrid Nuevo Norte), Carabanchel (due to Metro Line 11 expansion), and Las Tablas and Tres Olivos (due to new metro connections).
The specific projects underway include Madrid Nuevo Norte, a 2.3 million square meter redevelopment creating 10,500 homes and a new business district around Chamartin station, and the Metro Line 11 extension from Plaza Eliptica to Conde de Casal with 671 million euros in investment.
Historically, Madrid neighborhoods that gained new metro stations or major transit improvements have seen price increases of 10% to 20% within three to five years of completion, as better connectivity draws both residents and investors.
You'll find our latest property market analysis about Madrid here.
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.
Which Areas in Madrid Should I Avoid as a Property Investor?
Which neighborhoods in Madrid with lots of problems I should avoid and why?
The Madrid neighborhoods that require the most caution from property investors are certain pockets of Villaverde, parts of Puente de Vallecas, and the historic center if you are planning short-term rentals.
Here are the specific issues affecting each area:
- Parts of Villaverde Alto and San Cristobal: Building quality varies dramatically block by block, and resale liquidity can be limited.
- Entrevias and some San Diego streets (Puente de Vallecas): Higher tenant turnover and more management-intensive rental operations.
- Sol, Cortes, and Universidad (Centro): New tourist flat licenses are banned under Plan RESIDE, making short-term rental strategies unviable for new purchases.
For these Madrid neighborhoods to become viable investment options, Villaverde and Vallecas would need continued infrastructure upgrades and building stock renovation, while Centro would require regulatory changes that are unlikely given the current political direction toward protecting residential housing.
Buying a property in the wrong neighborhood is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Madrid.
Which areas in Madrid have stagnant or declining property prices as of 2026?
As of early 2026, most Madrid districts are showing positive year-over-year price growth rather than decline, though some areas like Retiro have experienced slight month-to-month softening from recent peaks, suggesting a pause rather than a downturn.
The approximate stagnation rate in these cooler Madrid markets is minimal, typically 0% to 2% below recent highs, which reflects market normalization after the strong 2024-2025 surge rather than any structural weakness.
The underlying causes of price moderation differ by area:
- Retiro: Already at high price levels (around 7,700 euros per square meter), limiting further upside from local buyers.
- Some Salamanca micro-areas: Ultra-premium pricing (above 10,000 euros per square meter) creates a smaller buyer pool.
- Outer PAU developments: New supply coming online in areas like Ensanche de Vallecas creates temporary price competition.
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Which Areas in Madrid Have the Best Long-Term Appreciation Potential?
Which areas in Madrid have historically appreciated the most recently?
The Madrid areas that have appreciated most strongly over the past five years are Salamanca, Chamberi, and several outer districts like Ciudad Lineal, Puente de Vallecas, and Fuencarral-El Pardo that started from lower bases.
Here is the approximate appreciation these top-performing Madrid areas have achieved:
- Salamanca: Around 24% year-over-year growth, driven by luxury demand and limited prime supply.
- Chamberi: Around 22% year-over-year growth, fueled by families seeking classic Madrid living.
- Ciudad Lineal: Strong double-digit annual gains as buyers sought more space post-pandemic.
- Fuencarral-El Pardo: Benefiting from Madrid Nuevo Norte anticipation and new family housing.
The main driver of above-average appreciation in these Madrid areas has been persistent supply shortage combined with strong demand from both domestic buyers priced out of other districts and international investors attracted to Madrid's relative value compared to other European capitals.
By the way, you will find much more detailed trends and forecasts in our pack covering there is to know about buying a property in Madrid.
Which neighborhoods in Madrid are expected to see price growth in coming years?
The Madrid neighborhoods expected to see the strongest price growth in coming years are Nueva Espana and Hispanoamerica in Chamartin, Las Tablas and Tres Olivos in Fuencarral-El Pardo, Delicias and Legazpi in Arganzuela, and Cuatro Caminos in Tetuan.
Here are the projected growth rates for these high-potential Madrid neighborhoods:
- Nueva Espana and Hispanoamerica (Chamartin): Expected 5% to 8% annual growth from Madrid Nuevo Norte proximity.
- Las Tablas and Tres Olivos: Projected 6% to 9% growth as the new metro connections materialize.
- Delicias and Legazpi (Arganzuela): Forecast 5% to 7% growth from continued gentrification and cultural appeal.
- Cuatro Caminos (Tetuan): Expected 5% to 7% annual appreciation as the Azca business district expands.
The single most important catalyst for future price growth in these Madrid neighborhoods is the combination of improved public transport connectivity and the spillover effect from buyers who can no longer afford prime central districts.
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What Do Locals and Expats Really Think About Different Areas in Madrid?
Which areas in Madrid do local residents consider the most desirable to live?
The Madrid areas that local residents consider most desirable are Recoletos and Castellana in Salamanca, Almagro and Trafalgar in Chamberi, El Viso and Nueva Espana in Chamartin, and Jeronimos and Ibiza in Retiro.
Here is what makes each of these Madrid neighborhoods attractive to locals:
- Recoletos (Salamanca): Elegant boulevards, proximity to Retiro Park, and Spain's best shopping streets.
- Almagro (Chamberi): Quiet residential streets, excellent local markets, and classic Madrid architecture.
- El Viso (Chamartin): Large detached homes, gardens, and a village-like feel within the city.
- Ibiza (Retiro): Green spaces, family-friendly atmosphere, and easy access to the city center.
These locally-preferred Madrid neighborhoods tend to attract established families, senior professionals, and wealthy retirees who prioritize quality of life, space, and neighborhood stability over nightlife or trendy dining.
Local preferences in Madrid largely align with what foreign investors target, though locals often value neighborhood character and long-term livability more than pure rental yield or short-term appreciation potential.
Which neighborhoods in Madrid have the best reputation among expat communities?
The Madrid neighborhoods with the best reputation among expat communities are El Viso and Hispanoamerica in Chamartin, Recoletos and Goya in Salamanca, Almagro and Trafalgar in Chamberi, and Justicia (Chueca) in Centro.
Here is why expats prefer these Madrid neighborhoods over others:
- El Viso and Hispanoamerica (Chamartin): International schools, corporate housing, and English-speaking services.
- Recoletos and Goya (Salamanca): Luxury amenities, safety, and proximity to upscale retail and dining.
- Almagro (Chamberi): Walkable charm, excellent cafes, and a balance of authenticity with comfort.
- Justicia (Chueca): Vibrant social scene, international restaurants, and welcoming atmosphere.
The typical expat profile in these popular Madrid neighborhoods includes corporate transferees on relocation packages in Chamartin, high-net-worth individuals in Salamanca, remote workers and entrepreneurs in Chamberi, and younger professionals and creatives in Chueca.
Which areas in Madrid do locals say are overhyped by foreign buyers?
The Madrid areas that locals most commonly say are overhyped by foreign buyers are Recoletos in Salamanca, Sol and Cortes in Centro, and some new-build developments in Las Tablas.
Here is why locals believe these Madrid areas are overvalued:
- Recoletos (Salamanca): Prices above 10,000 euros per square meter deliver yields under 3.5%, making it a capital preservation play rather than an income investment.
- Sol and Cortes (Centro): Tourist noise, short-term rental restrictions, and limited parking make daily life less convenient than the "central location" premium suggests.
- Some Las Tablas new builds: Premium pricing for suburban locations that lack the walkability and character of established neighborhoods.
Foreign buyers typically see prestige addresses, tourist proximity, and modern finishes in these Madrid areas, while locals tend to prioritize practical considerations like noise levels, parking, local shops, and neighborhood community that don't always align with investment brochure selling points.
By the way, we've written a blog article detailing the experience of buying a property as a foreigner in Madrid.
Which areas in Madrid are considered boring or undesirable by residents?
The Madrid areas that residents most commonly consider boring or less desirable are the outer PAU developments like Ensanche de Vallecas and Sanchinarro, some industrial-adjacent parts of Villaverde, and car-dependent areas of Vicalvaro.
Here is why residents find these Madrid areas less appealing:
- Ensanche de Vallecas: Modern but somewhat sterile urban planning with limited street life and few independent businesses.
- Sanchinarro: Family-oriented but lacks the walkable charm and cultural activity of central neighborhoods.
- Parts of Villaverde: Industrial heritage, limited dining and entertainment options, and perception issues that affect social appeal.
- Outer Vicalvaro: Long commute times to city center and fewer amenities than more established districts.
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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 |
|---|---|---|
| idealista (Sale Prices) | Spain's largest property portal with transparent, consistent price data. | We used it to benchmark sale prices per square meter across all Madrid districts. We then translated district-level data into specific neighborhood examples. |
| idealista (Rent Prices) | High-frequency rent dataset with clear methodology and broad coverage. | We used it to benchmark monthly rents per square meter by district. We combined it with sale data to calculate gross rental yields. |
| Ayuntamiento de Madrid | Official city statistics with downloadable district and barrio data. | We used it as a ground-truth cross-check against private listing indicators. We anchored our geographic references to official district boundaries. |
| INE (House Price Index) | Spain's primary official statistics body for national housing benchmarks. | We used it to frame the broader Spain-wide price cycle. We avoided over-interpreting listing noise by comparing to official HPI direction. |
| Banco de Espana | Central bank with heavily data-driven rental market analysis. | We used it to explain why rents and affordability pressures behave the way they do. We interpreted risk factors for landlords using their effort rate analysis. |
| Colegio de Registradores | Property registry data showing legal records, not just listings. | We used it to ground claims about foreign buyers and transaction activity. We cross-checked portal-based price movements against registry data. |
| Tinsa | Long-standing appraisal firm providing valuation-based indices. | We used it to triangulate Madrid's price trend with professional appraisal values. We treated it as a cycle check when portal prices moved quickly. |
| Inside Airbnb | Widely used independent dataset for short-term rental analysis. | We used it to identify where short-term rentals are densest. We treated it as the supply-side lens for Airbnb investment analysis. |
| Plan RESIDE (Ayuntamiento) | Official city government description of tourist housing regulations. | We used it to assess regulatory risk for Airbnb-style investing. We highlighted where rules are tightening versus where short-term rentals remain feasible. |
| Metro de Madrid | Official infrastructure updates with concrete investment amounts. | We used it to identify districts likely to benefit from better connectivity. We connected transport plans to up-and-coming rental demand corridors. |
| Madrid Nuevo Norte | Official project developer website for Europe's largest urban regeneration. | We used it to flag long-horizon appreciation catalysts near Chamartin. We stuck to officially described scope to avoid speculation. |
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