Madrid property market

2024 Full Year

The Madrid housing market in 2024 demonstrated strong momentum, driven by rising sales volumes, renewed interest from both domestic and international buyers, and a significant uptick in new housing development. Prices continued their upward trajectory, particularly in the resale market, while the mortgage segment expanded in line with improving financing conditions. This report examines the key housing market indicators and trends shaping the capital’s property landscape over the past year.

Sales performance

The Madrid region’s housing market recorded a healthy volume of home sales in 2024, with a total of 88,229 transactions, an annual increase of 16% (Fig. 1-1). This figure was also 13% above the region’s ten-year average and 54% higher than a decade ago, showcasing long-term growth in market activity.

Foreign demand remained a significant contributor, accounting for 8,952 of total sales—an annual increase of 16%, which is also 15% above the ten-year average and up 40% over ten years. Of these, most transactions (7,723) were made by expats residing in Spain, while 1,229 were by foreign non-residents (FNR), typically purchasing second homes or investment properties (Fig. 1-2). Year-on-year, expat demand rose by 15% and FNR transactions grew even faster at 23%. Over ten years, the FNR segment has surged by 158%, far outpacing the 31% growth in expat purchases.

Despite these strong figures, the market share of foreign buyers marginally declined to 10.3% from 10.4% the previous year (Fig. 1-3), suggesting that domestic demand has risen slightly faster.

New-build home sales also grew, with 8,774 transactions recorded, up 13% year-on-year (Fig. 1-4). Compared to the long-term average, this figure was 67% higher, although ten-year growth has been modest at just 0.8%.

Madrid city home sales

Looking just at homes sales in Madrid city, there were just over 45,000 sales in 2024, a year-on-year increase of 16% (Fig. 1-5). This segment saw 14% growth compared to its ten-year average and has grown by 43% over the past decade.

House price trends

The average price of homes sold in the Madrid region in 2024 was €326,134 (Fig. 2-1), representing an annual increase of 8%. For new-build properties, the average price was higher at €358,649, but showed a year-on-year decrease of 9%. This indicates potential short-term downward pressure in the new-build segment despite long-term value growth.

The long-term trend tells a different story. Over the past decade, the price index for all residential property in Madrid has risen from 100 to 174.6, meaning property prices have increased by 75% (Fig. 2-2). In contrast, the price index for new-build homes only rose to 145.9—an increase of 46%. This suggests that resales have appreciated more strongly than new builds. Over the last five years, overall property prices rose by 75%, compared to just 11% for new-build homes. Possible reasons for this could include the increasing scarcity and value of centrally located existing homes, as well as cost pressures and slower delivery schedules in the new-build sector.

Asking prices in Madrid city

According to the property portal Idealista, the average asking price in Madrid city stood at €4,475 per square metre, up 12% compared to the previous year (Fig. 2-3). Over the last five years, the asking price has increased 21%. The ten-year asking price index now stands at 164.5, signifying a 65% rise over the decade.

This strong growth in asking prices, especially compared to sale prices, highlights continued seller confidence and could reflect unmet demand or speculative pricing dynamics, particularly in desirable urban areas of the capital.

Mortgage market

In 2024, Madrid saw 61,363 new mortgage approvals (Fig. 3-1), representing a substantial year-on-year increase of 19%. This was also 15% higher than the ten-year average and marks significant growth of 72% compared to mortgage activity a decade ago.

The average Euribor rate, which serves as the benchmark for most Spanish mortgages, was 3.27% in 2024 (Fig. 3-2). This represents a decline of 15% from the previous year. Over the last ten years, Euribor has ranged between a low of -0.49% in 2021 and a peak of 3.86% in 2023. The current level indicates a slight easing from last year’s peak.

This decline is consistent with broader expectations of European Central Bank (ECB) monetary policy. After aggressive rate hikes in 2022 and 2023 to curb inflation, the ECB has signalled a shift towards a more dovish stance in 2024, anticipating rate cuts in 2025 should inflation continue to moderate. Mortgage activity is likely to remain robust if this monetary easing continues.

Housing starts

There were 18,412 housing starts in Madrid during 2024, based on planning approvals (Fig. 4-1). This reflects a 23% year-on-year increase, and a 16% gain on the ten-year average. Over the last decade, housing starts in Madrid have more than doubled, up 102%.

This growth in residential construction is essential to meeting strong demand and improving supply-side fundamentals. However, whether output can keep pace with population growth and housing demand remains an open question.

Summary

• Home sales in Madrid increased by 16% year-on-year, with foreign demand also up significantly.
• New-build sales grew 13%, but new-build prices fell 9% year-on-year.
• Overall property prices rose 8%, and have grown 75% over a decade.
• Asking prices show continued strength, up 12% annually and 21% over five years.
• Mortgage activity grew by 19%, supported by a slight easing in interest rates.
• Housing starts jumped 23% and are now double their level of ten years ago.

Conclusion

The Madrid housing market maintained strong momentum in 2024, with rising sales volumes, increasing mortgage activity, and sustained demand from both domestic and foreign buyers. While prices for newly built homes showed a short-term dip, resale properties and asking prices continued to rise, reflecting overall market strength.

The moderation in Euribor suggests that borrowing conditions may further improve in 2025, offering additional support to buyers. Meanwhile, the robust increase in housing starts indicates developers are gearing up to meet demand.

Looking ahead, market fundamentals appear solid. If borrowing costs ease further and housing supply expands steadily, Madrid could see continued balance between demand and prices, with moderate, sustainable growth in the years to come.

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2024 H1

The first half of 2024

Sales

In the first half of 2024, there were 43,445 home sales in the Madrid region, representing a year-on-year increase of 9.5% (Fig. 1-1). This marks a rise of 11% compared to the ten-year average and a cumulative 56.9% increase over the past decade.

Sales involving international buyers totalled 4,356, showing a year-on-year growth of 13.1% and a 12% increase against the ten-year average. Over a decade, such purchases have surged by 46%. Among these, 3,807 transactions were by foreigners residing in Spain (expats), up 13.8% year-on-year, while 549 transactions involved foreign non-residents (FNR), primarily buying second homes or investments, marking an 8.9% annual increase (Fig. 1-2). Over the past ten years, expat purchases have grown by 37.2%, and FNR purchases by 163.9%.

Foreign buyers accounted for 10% of the market share, slightly higher than the 9.7% recorded a year ago but below the ten-year peak of 11.6% (Fig. 1-3).

New-build home sales totalled 3,972, down by 13.7% year-on-year (Fig. 1-4). Compared to the ten-year average, this was a 2.1% decline, but over the decade, sales of new builds have risen by 58.1%.

In Madrid city, there were 22,049 home sales, a year-on-year increase of 5.9% (Fig. 1-5). This reflects a 9.4% rise compared to the ten-year average and a cumulative 42% increase over ten years.

The affluent northwest suburbs (NWS), encompassing municipalities such as Pozuelo de Alarcón, Majadahonda, and Las Rozas, recorded 3,520 home sales, a robust year-on-year increase of 16.2% (Fig. 1-6). Over ten years, sales in this area have grown by 62.7%. These municipalities are popular among affluent locals and international buyers seeking upscale residential properties.

Prices

The average price of homes sold in the Madrid region during H1 2024 was €311,991.4 (Fig. 2-1 & 2-2), reflecting an annualised increase of 3.2%. Newly built homes averaged €377,020.9, a slight annual decrease of 2.6%.

Over a decade, the property price index rose from 100 to 168.7 for all properties and to 155.3 for new builds (Fig. 2-3). This indicates a 68.7% rise in all property prices and a 55.3% rise in new-build prices over ten years, showing robust long-term appreciation despite occasional fluctuations. Over the past five years, prices have risen 68.7% for all properties but only 21.8% for new builds, suggesting stronger growth in the broader market.

In Madrid city, the average asking price in H1 2024 was €4,362.8 per square metre, an annual increase of 10.6% (Fig. 2-4).

Over the last five years, asking prices have risen by 17.7%, and a ten-year index shows a rise from 100 to 161.1 (Fig. 2-5), reflecting strong demand and limited supply in the city.

Mortgages

There were 29,589 new mortgages signed in Madrid (region) during the period (Fig. 3-1), up 11.9% year-on-year. Compared to the ten-year average, this represents an 11.5% increase, and over a decade, mortgages have grown by 75.7%.

The average Euribor rate, used as a reference for most Spanish mortgages, was 3.67% (Fig. 3-2), slightly below last year’s high of 3.69%. This marks a significant recovery from the 2021 low of -0.49%. The European Central Bank’s ongoing monetary tightening has driven rates higher, and markets anticipate continued moderation in the medium term.

Housing starts

There were 10,095 housing starts in the Madrid region based on planning approvals in H1 2024 (Fig. 4-1), an impressive annual increase of 39.2%. Compared to the ten-year average, this represents a 21.2% rise, and over the decade, housing starts have surged by 135.3%.

The ten-year index of housing starts (Fig. 4-2) underscores a strong upward trend, signalling robust construction activity to meet growing demand.

This report highlights the Madrid region’s resilient property market, marked by strong sales growth, consistent price appreciation, and a dynamic new-build and mortgage market. This stability and growth make Madrid an attractive destination for local and international property investors.

Disclaimer

These reports are prepared in good faith using publicly available data. While efforts are made to ensure accuracy, no guarantees are provided regarding the completeness, reliability, or suitability of the information for any purpose. Use of this information is at your own risk.

The author accepts no liability for errors, omissions, or actions taken based on the content. Information is subject to change without notice.

These reports are for informational purposes only and do not constitute professional advice. Readers should conduct their own research and consult qualified professionals before making investment or business decisions.

By using this resource, you agree the author is not liable for any direct, indirect, incidental, or consequential losses arising from its use.

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