The Spanish capital is consolidating itself as a preferred destination for the wealthy, boosting the luxury real estate market. According to the real estate consultancy Knight Frank, this segment will experience a 5% increase in its prices during 2024, motivated by strong demand and the arrival of an increasing number of millionaires to the region.
Factors driving the boom:
- Increase in the high-net-worth population: An increase of 30% is expected in the number of residents with a net worth of over $1 million in Madrid by 2027, compared to 2022 data.
- Strong influx of foreign investment: Madrid became the Spanish region that attracted the most foreign investment in 2023, attracting more than 54% of the national total, thanks to the attractive fiscal measures and facilities implemented by the regional government.
- Attractiveness of the city: Madrid continues to position itself as an attractive destination for the wealthy thanks to its favorable business climate, its vibrant cultural offer and its excellent quality of life.
- Resilience of the prime market: Unlike the general real estate sector, the prime segment in Madrid demonstrates remarkable resistance to economic fluctuations, driven by the search for safe-haven assets by investors.
- Characteristics of prime housing: The most demanded properties in this segment are those of classic style, with high ceilings and high-quality finishes.
The measures implemented by the Community of Madrid, have played a fundamental role in attracting foreign investment and the boom in the luxury real estate market:
- Low taxes: The region maintains an attractive fiscal policy, with one of the lowest income tax rates in Spain.
- Support for entrepreneurship: Measures have been implemented to facilitate the creation and management of companies, as well as to promote youth employment.
- International promotion: Madrid has intensified its presence at international fairs and events, and has collaborated with organizations to attract foreign investment.
- Infrastructure improvement: Significant investments have been made in transportation, communications and other public services to create an attractive business environment.
Overall, these factors create a favorable outlook for the luxury real estate market in Madrid, with strong demand and expectations for sustained growth in the coming years. Knight Frank, recognized as the world’s leading private real estate consultancy, anticipates that prime housing prices will continue to rise, even exceeding their own initial forecasts for 2023.
If you are considering investing in a luxury property in Madrid, this is an opportune moment to take advantage of the favorable market conditions and the potential for future appreciation.
