Renovated prime housing in Madrid soars to more than €10,000/m2

Madrid's high-end residential market continues to attract foreign investment, especially American buyers who see the region as the “European Miami”, according to Lucas Fox, the luxury housing estate agent. According to their data, renovating a home in the capital's 'prime' neighbourhoods can increase its price by more than 70% to over €10,000/m2. Jerónimos (€20,800/m2), Recoletos (€17,300/m2) and Goya (€15,000/m2) stand out the most, but La Moraleja (€12,000/m2) and Pozuelo (€11,500/m2) are also noteworthy.

“Madrid is currently experiencing a residential luxury boom across the city from the Salamanca neighbourhood to other exclusive areas in the north of the capital or towns in the autonomous community,” says Alexander Vaughan, founding partner of Lucas Fox.

Tax incentives, reduced interest rates and the strength of demand in the face of a scarce supply of 'prime' housing will boost residential luxury in Madrid this year after this exclusive market experienced a 10% price increase in 2023, according to the estate agent. By 2024, they foresee an increase that will never be below 5%.

Prices rose considerably in the Salamanca district (12%), while they were between 5% and 10% in other premium areas in the Community of Madrid, such as La Moraleja, Las Rozas de Madrid and Boadilla del Monte.

Lucas Fox highlight the opportunities in Madrid's residential luxury market compared to other European capitals. The average 'prime' square metre price in the Salamanca district was just over €7,000/m2 at the end of 2023.

Buying interest is distributed equally between Spanish and foreign buyers, where Americans stand out. "The American market is currently very keen – both American and Latin American investors – as they perceive Madrid as an international city with a Miami-style lifestyle, culture and cuisine, but in Europe", highlights Rod Jamieson, managing partner at Luke Fox.

These foreign investor profiles are families who come to Madrid for professional reasons and are looking for a property, generally in quiet areas in the north of the capital, with good connections to the city centre and schools. However, some have an asset-oriented approach and buy a property, mainly in the Salamanca area, to spend between three to six months a year there.

The agency highlights the tax incentives approved by the regional government of Isabel Díaz-Ayuso, which "will favour the arrival of international home buyers." These incentives allow 20% of the total investment made by any person who has not resided in Spain in the last five years and wants to move to the region to be deducted from the regional income tax. The only requirement is that they remain there for a minimum of six years, the maximum limit the tax relief can maintain.