Madrid’s luxury residential market has entered a new phase of maturity and structural strain. In just a decade, access to the prime segment has fallen to historic lows. With €1m, a buyer can now acquire around 110 square metres, compared with the 240–330 square metres available in 2014 across the capital’s five most exclusive postcodes: Recoletos, Castellana and Jerónimos, Almagro–Traflagar–Justicia and Ibiza–Niño Jesús. These findings are set out in the report A Decade of the Prime Real Estate Market in Madrid: Evolution and Trends (2014–2025), presented by Diza. Particularly striking is the fact that €1m now buys just an 80-square-metre flat in Recoletos.
The study, led by professors Fernando Pinto Hernández and María Luisa Medrano García of Rey Juan Carlos University, calculates a cumulative increase of 95.26% in the price per square metre across the Community of Madrid, its municipalities and postcodes over the past decade. The authors stress that this rise is not driven by speculation, but by a structural imbalance between an extremely limited supply in prime locations and growing, solvent international demand.
The pandemic, a turning point
Far from acting as a brake, the pandemic proved to be a catalyst for the cycle. In 2020, the adjustment in the prime segment was marginal (-1.5%), and from 2021 onwards, prices accelerated sharply, with post-Covid growth reaching 54.33%, well above the levels recorded between 2014 and 2019.
This shift has been driven by factors such as the rise of international remote work, the mobility of major European and Latin American wealth, and the growing demand for refurbished homes that meet premium standards in high-quality urban settings.
At the presentation, Fernando Pinto described the current period as “a decade of profound transformation that has consolidated Madrid as one of Europe’s leading high-end residential hubs.”
A more diverse and, in some neighbourhoods, younger buyer profile
Although the median age of the prime buyer has risen from 43 to 47 in the post-Covid period, the report identifies a younger clientele in areas such as Almagro, Justicia, Ibiza and Niño Jesús, where the share of buyers aged 30 to 45 is increasing. These include expats, tech professionals and global executives drawn by urban vitality and the quality of refurbished, high-spec homes.
In the more traditional districts – Recoletos, Castellana and Jerónimos – high-income buyers, both domestic and international, continue to dominate.
The research also confirms the expansion of Madrid’s prime residential market into the metropolitan area. Municipalities such as Alcobendas (La Moraleja), Pozuelo de Alarcón, Majadahonda, Tres Cantos and Boadilla del Monte have recorded very strong price growth, driven by demand for single-family homes, privacy and access to international schools. In some cases, notably Boadilla del Monte, post-pandemic growth has multiplied several times compared with the pre-pandemic period.
Differences within the prime sector itself
An analysis by postcode reveals divergent dynamics, underlining the existence of autonomous micro-markets. While Recoletos (28001), Castellana (28006) and Jerónimos (28014) continue to command the highest prices and show minimal turnover, other areas such as Almagro–Trafalgar–Justicia (28010) and Ibiza–Niño Jesús (28009) have recorded the strongest relative growth since the pandemic.
In contrast to the Community of Madrid as a whole, these prime postcodes experienced their sharpest increases before the pandemic. The post-Covid phase has been marked by more selective demand, with buyers placing a premium on asset quality and exact location.
Although Spanish buyers remain in the majority, representatives of DIZA Consultores note that international purchasers are steadily gaining ground, particularly from Italy, the United States, Mexico and other Latin American countries.
“Madrid attracts profiles from all over the world. Whether Spanish or foreign, newcomers tend to settle in prime areas, intensifying pressure on an already very limited supply,” explained María Luisa Medrano.
Madrid, a global prime market with potential
The report concludes that the developments of the past decade have a structural basis: a scarcity of supply, the steady inflow of solvent international buyers, and Madrid’s competitive position as a safe and efficient residential destination.
According to Pinto, future growth will depend on the volume of refurbished homes brought to market and on preserving the capital’s urban appeal.
