Else Beekman
Madrid’s property market has once again reached record highs, with sales and rental prices both exceeding the levels of the 2007 property bubble. Prices of homes and rental properties in the Spanish capital have risen by 15% and 50% respectively since 2007, making the city’s housing crisis even more difficult to solve.
This is evident from the latest report from the Fotocasa Real Estate Index, which was published on Thursday. In April 2024, the average sales price in Madrid reached an all-time high of €5,188 per square metre. This is an increase of 20.8% compared to the previous year. Madrid thus joins Palma de Mallorca, Málaga and Las Palmas de Gran Canaria as cities with the highest house prices in Spain. For comparison: during the 2007 real estate bubble the price per square metre was €4,523. This means that a typical home of 80 m² now costs approximately €415,040.
Rents continue to rise
According to Fotocasa, the situation on the rental market is even more worrying. Since July 2022, when monetary policy changed and interest rates started to rise, rental prices have shown a continuous upward trend. The current rental price in Madrid is almost €20 per square metre (€19.91/m²), an increase of 49.2% compared to 2007, before the property bubble burst, when the average rent was €13.34 per square metre .
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A continuous upward trend
Fotocasa points out in La Razon that rental prices in Madrid, as well as in the rest of Spain, have reached their highest level ever. Since the recovery from the financial crisis in 2015, Madrid has experienced a stronger and more intense increase in rental prices compared to the national average. Continued increases in both the sales and rental markets are making it increasingly difficult for residents to find affordable housing.
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