Madrid Ranks #2 in Europe for Real Estate Investment Appeal

Madrid has overtaken Paris and taken second place in the ranking of the most attractive European cities for real estate investment. The Spanish capital is second only to London, which leads the study “Emerging Trends in Real Estate in Europe 2025”, carried out by PwC and the Urban Land Institute.In just five years, Madrid has risen from eighth to second place, which is its best result in history. As a result, it has transformed from an emerging market into a consolidated European benchmark for real estate investment. This is the outcome of an urban strategy that has been maturing for years and thanks to which foreign investors no longer see the city as an alternative, developing market, but as a reliable and promising investment destination in the medium and long term.

Madrid has taken a leading position thanks to a unique combination of the following factors:

economic growth and stability;
high quality of life;
competitive prices;
good infrastructure and transport network;
well-developed healthcare system;
diversified real estate market;
appeal to Latin American investors;
mobility;
digitalization of public services.

In the “Mapping the World’s Prices 2025” ranking compiled by Deutsche Bank, Madrid ranks 16th among cities worldwide with the best quality of life, ahead of Milan, Brussels and Barcelona, which is in 46th place.

Against the backdrop of a general slowdown in economic growth, the outlook for the Spanish capital appears very positive. According to forecasts, by the end of 2025 its GDP will grow by 2.8%, which is 0.2 percentage points higher than the figure for Spain as a whole. Moreover, this growth trend is expected to continue throughout 2026.

Although housing in Spain continues to become more expensive, the price per square metre in Madrid remains relatively affordable compared to other European cities. According to the Idealista portal, in September it reached EUR 5,677/m², with significant variations depending on the district. For example, on Paseo de Recoletos, which has become the most expensive street in Spain, one square metre costs EUR 19,000. By contrast, in the Salamanca district the average price is EUR 9,706/m², while in Usera it is EUR 3,177/m².

According to experts, these prices are still acceptable for investors with high purchasing power and have room for further growth. At the same time, Madrid offers a wide range of opportunities for every type of real estate investor – from the low-budget segment to prime properties.

The top ten most attractive cities in Europe for real estate investment are as follows (position in 2024 in brackets):