Madrid leads the way in luxury real estate investment attractiveness

PUBLISHED ON

Junio 10, 2024

CATEGORY

Real Estate

Madrid is consolidating its attractiveness as a focus for investment in luxury real estate. This is evidenced by the performance of prime residential property in the capital, which will rise in value again in 2024.

According to Knight Frank data, the average price of luxury real estate in Madrid has been rising for three years - in 2020, the year of the pandemic, it fell by 4.0%. In 2022 and 2023, the index prepared by this consultancy firm reflects rises of over 6%. Moreover, the trend is expected to continue in 2024. Knight Frank forecasts an additional 5% increase this year, which places Madrid as the European capital where prices are growing the most. 

Madrid is also one of the most competitive locations for luxury real estate. As reflected in the Knight Frank index, a million dollars buys three times more prime space in the Spanish capital than in London. In this respect, Madrid is far ahead of cities such as Monaco, New York, Paris, Tokyo and Berlin. 

Why invest in luxury real estate 

Although it is not affordable for everyone, investing in luxury real estate represents a great opportunity to diversify your portfolio and obtain attractive returns in an exclusive market. 

Among their main advantages is their immunity to market ups and downs. Luxury real estate tends to maintain its value even in times of market volatility. Prime locations and exclusive features make these assets less susceptible to economic fluctuations, offering long-term stability to investors.
In addition to good protection against financial risk, luxury real estate often offers higher potential returns compared to standard properties. Premium rents and long-term capital appreciation can offer attractive returns, albeit at the cost of a significant initial investment. 


The most desirable areas

Knight Frank points out that the price of prime housing rose in 2023 in all luxury areas of Madrid. The Salamanca neighbourhood takes the lead, with an average increase of 14% in the price per square metre.
Areas such as Justicia attract, according to Knight Frank, a younger type of international buyer. Almagro and El Viso are also areas that are attracting considerable interest from buyers looking for more tranquillity. 
Luxury real estate is an attractive option for investors seeking diversification and solid returns in a select market. With its stability, attractive yields and diversification potential, luxury real estate offers a unique opportunity to build wealth and secure a stable financial future.