The article analyzes the luxury real estate market in Madrid, highlighting the vision of Elena Jori, Real Estate Director at Home Select. It focuses on exclusive new-build or fully renovated developments such as Serrano 92, Núñez de Balboa 3, Velázquez 53, General Oraá 9, Santa Engracia 65, and Hermosilla 47 (Mandarin Oriental Residences), mainly in Barrio Salamanca and other prime areas like Jerónimos, Chamberí, Justicia, El Viso, and La Finca.
Madrid’s luxury market is booming, driven by limited supply and high demand, particularly from foreign buyers from Latin America, as well as national investors and some from the U.S. and France. Prices have reached record levels, with Serrano 92 standing out at €25,000/m² and the average for the prime market at €16,500/m².
Buyers are looking for spacious homes with premium finishes and luxury common areas, whether as a primary or secondary residence. Foreign families tend to opt for single-family properties in neighborhoods with good schools and socioeconomic stability.
According to data from Knight Frank’s Prime Global Cities Index, luxury housing in Madrid has risen by 5.5% annually in the third quarter, with stable growth expected over the next five years thanks to an international market, limited stock, and low interest rates. Regarding the prime rental market, prices are also increasing, albeit more slowly, with projections indicating continued growth due to the structural shortage of housing.
Serrano 92, Núñez de Balboa 3, Velázquez 53, General Oraá 9, Santa Engracia 65, and Hermosilla 47 (the Mandarin Oriental Residences) are some of the exclusive (and scarce) new-build or fully renovated developments located in the heart of Madrid. Most are situated in Barrio Salamanca, the traditional epicenter of the prime segment, although other areas such as Jerónimos, Justicia, Chamberí, El Viso, and La Finca are also on the radar of affluent buyers.
The luxury market is thriving in Spain’s capital (partly thanks to branded residences) and due to the interest of wealthy foreign buyers, primarily from Latin America. Prices continue to rise and have reached unprecedented levels because of limited supply and strong demand. Currently, Serrano 92 is the most expensive development on the market, with prices reaching €25,000 per square meter—an unthinkable figure just a few years ago.
This exclusive development offers seven three-bedroom homes, common areas surrounded by interior courtyards, and even a secret garden with a gallery-integrated pool. The project, located in a 4,000-square-meter building originally constructed in 1929, is the first new-build project on Calle Serrano in the last five years.
“Madrid is increasingly approaching the sales prices of other European capitals such as Paris and London. In the resale market, we are also seeing properties at €18,000 per square meter when it comes to unique homes in the best locations that meet buyers’ requirements: classic buildings, impressive entrances, upper floors or penthouses, and many balconies overlooking the street,” explains Elena Jori, Real Estate Director at Home Select, a luxury real estate agency. Currently, the average prime price per square meter in Madrid is €16,500.
Foreign Capital
Foreign buyers are the main drivers of the high-end domestic market. Wealthy individuals are drawn to Madrid by the city’s lifestyle, cultural and culinary offerings, safety, and legal stability. “The arrival of discerning clients with high purchasing power has contributed to creating an offer that meets their expectations. Madrid remains that welcoming city, still more affordable compared to other European capitals, that embraces foreign buyers like no other. Moreover, ten years later, it is now much more international and cosmopolitan,” says Elena Jori.
Regarding buyers’ origins, most come from Latin America, primarily Mexico, Venezuela, Peru, and Colombia. “Alongside this profile, we are also seeing national investors from Barcelona and other provincial capitals. In general, these are entrepreneurs with prosperous family businesses looking to have a property in Madrid and diversify their assets. Recently, we have also seen U.S. and French clients setting their sights on Madrid as a trendy city with high potential for appreciation,” adds the Real Estate Director of Home Select.
As for the most sought-after property types, potential buyers are looking for homes in the city center with large spaces, top-quality finishes, and common areas such as wine cellars, gyms, pools, or spas. These properties are used as either primary or secondary residences.
In the case of single-family homes, young foreign families aged between 35 and 50 typically opt for these properties, seeking the best schools for their children and stable socioeconomic surroundings. “Spacious areas, multipurpose rooms, and large outdoor spaces are prioritized, without compromising on design, quality, and the finest finishes,” notes Ramón De Salas, General Director of De Salas, a luxury real estate agency.
Price Evolution
Regarding price trends, luxury housing increased by 5.5% annually during the third quarter, according to the Prime Global Cities Index (PGCI) report by Knight Frank. “Madrid has demonstrated unique stability with quarterly growth of 1.2% between July and October, supported by its investment appeal, quality of life, and the interest of increasingly sophisticated buyers, both nationally and internationally,” the report highlights. The Spanish capital ranks 12th in price growth, just behind Lisbon (5.6%) and Perth (5.6%). Globally, luxury sector prices slowed with an average annual growth of 2.9%, “significantly below the 10-year average of 4.6%.” For the next five years, the consultancy predicts continued price growth supported by a stable local economy and solid fundamentals. Ramón De Salas shares this view: “With a limited housing stock, low interest rates, and an increasingly international market, we expect price increases similar to those experienced up to 2025 but much more dynamic—provided the political environment ensures some stability for investors.”
Prime Rental Market
What about the prime rental market? Globally, prices are evolving at the same pace as the sales market but decelerating. According to the Prime Global Rental Index, rents increased by 1.9% in major cities worldwide during the third quarter, marking the most moderate rise since Q2 2021.
“The rental market is feeling the pressure of affordability constraints after a two-year period in which rent increases outpaced inflation in almost every market. Despite the slowdown, our view is that the structural shortage of new housing in major cities means rents are likely to rise faster than trend levels in the coming years,” says Liam Bailey, Global Head of Research at Knight Frank. The largest price declines occurred in Toronto (5.6%), followed by Singapore (4.8%) and Hong Kong (0.1%). In contrast, rents grew in Sydney (8.4%), Zurich (5.6%), Berlin (5.4%), Los Angeles (3.7%), Miami (3.2%), and Auckland (2.9%).
Link Article El Economista