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Madrid home prices bounce back
13 May
Global real estate consultant Knight Frank reports that Madrid’s home prices have rebounded, increasing 46% since the market low seen in Q3 2012.

The World Property Journal reported that at the end of 2016 saw Madrid’s prime residential market regain stability, and since the beginning of 2017, Knight Frank's Madrid Prime Residential Index has surpassed a 43-city average.

In 2018, luxury home prices grew by 8.1%, while luxury new homes sold by the Knight Frank team grew by 50% between 2017-18 and 2018-19.

A few key elements have boosted Madrid’s residential market, the primary being the city’s booming commercial sector – with finance, tech, logistics and communications all growing exponentially.

The Ministry of Economy revealed that six out of every €10 invested in Spain is invested in the capital.

Additionally, the city attracts plenty of tourists. In 2017, more than 6.7 million tourists visited, while the Madrid Barajas Airport has registered a 50% increase in passenger numbers since 2004.

When compared with other first tier European cities, prime values in Madrid are highly competitive. The city’s cost of living is low and ranks high for its quality of life, further providing good reason as to why many are choosing to buy property here.

Ever since 2016, central Madrid areas such as Sol, Embajadores and the heart of the city close to Plaza Mayor have gained popularity, contrasting with previous favoured areas in the city’s northern districts.

Data has also shown that although the majority of prime buyers (65%) originate from Spain, this figure would have been much higher a decade ago (90%) – proving that more and more foreign buyers are choosing to purchase property in Madrid. Around 18% of these originate from Latin America, particularly from Mexico.

As for reason for purchase, around 50% of prime buyers are looking for a permanent or second homes for personal use, 22% are seeking a rental investment and 28% have credited multiple reasons, such as wanting a holiday home, rental investment and purchasing property for their child to use while at university.

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