Madrid has been recently ranked as the fourth most favorable European city for real estate investment, behind only London, Berlin and Paris. As one of Europe’s fastest growing cities, Madrid emerges as an exceptional choice for real estate investment, driven by its growing population, abundant employment opportunities, and the continuous upward trajectory of investments. The city’s prospects appear promising, and the current trends indicate a continued positive outlook for the future.

The Spanish capital not only is the largest city in the country, but it also boasts a thriving population of 3.3 million inhabitants (metropolitan population of 6.5 million). According to figures provided by the city council, Madrid expects to maintain growth of more than 1% per year due to immigration from within Spain, but also from abroad. With the highest per capita GDP in the nation, Madrid surpasses the European Union average, standing at €34,821 compared to €32,430. This can be attributed to the successful implementation of local policies and a consistently growing demand, as highlighted by Madrid’s attraction for the world’s largest companies. Furthermore, Madrid is highly attractive in terms of employment, boasting an unemployment rate of 10% compared to the national average of over 12%.

With regard to the total investment made in different sectors, we must first highlight the performance of the Multifamily sector, which represented 41% of the total investment amounting to approximately €1 billion for the first four months of 2023.It was followed by the office sector with 32%, hospitality with 13%, logistics with 6%, alternative segments with 5%, and finally retail with 3%.

Emerging as a pivotal city in Southern Europe, Madrid attracts an annual influx of 5.05 million tourists, in addition to significant wealth from Latin America. Recent developments indicate a substantial surge in interest, surpassing Barcelona in both tourist numbers and hotel projects in 2022. This sustained rise in interest extends beyond residential real estate and encompasses the hotel and retail sectors as well. This is reflected in an investment of over €130 million in the first four months of the year and an increase of 300 luxury rooms, from 2400 rooms in 2022 to 2700 in 2023.

Regarding cross-border residential investment, Madrid emerges as the second-leading European city, only behind Berlin in investment volume for 2022 with an impressive sum of over €1.4 billion. According to forecasts made by different consultancy firms, this trend is expected to continue over time thanks to the strong demand observed in the city. This surge in investment exemplifies the capital’s allure and accounts for a 58% of all investments made in Madrid. HNWIs are investing in Madrid, with more than 20% of the total investments coming from wealthy Latin Americans, who are selecting renowned neighborhoods such as Salamanca or Chamberí.

Despite the prevailing economic situation, Madrid demonstrates remarkable resilience, as evidenced by the consistent rise in residential real estate with increases of around 2.4% in Q2 2023. This resilience underscores the stability of the real estate market in the capital and signifies a commitment to maintain its strength over time.

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