Despite it being the third largest city in Europe, Madrid is surprisingly overlooked by Britons who are looking for a second home in Spain.
Barcelona and Palma de Mallorca may have hogged the property headlines for years, but the Spanish capital’s time has finally come.
That’s the view of consultants PwC, which has placed the city at number three for investment prospects in Europe this year, hot on the heels of Berlin and Dublin. Investors, including several Chinese property companies, are pouring capital into Madrid, and the outlook is positive.
“After six years of recession in Spain and price reductions of up to 40 per cent, the Madrid market is starting to move,” confirms Rod Jamieson of agents Lucas Fox (www.lucasfox.com). “In the last quarter the city registered a price increase of 2.7 per cent, the first rise since 2007.”
Jamieson says investors come for strong capital growth and rental yields of four to five per cent, while non-Europeans are also drawn to the Golden Visa programme, allowing anyone spending more than £370,000 to gain Spanish residency.
ELEGANT, GREEN AND A LEGENDARY NIGHTLIFE
These knockdown prices are matched by a knockout lifestyle. Jamieson is British born, but has lived in Madrid for several years — and is quick to list why.
“It’s a low-level, elegant, green and friendly city, where three million people enjoy being outside — and it has a legendary nightlife,” he says.
“It is Spain’s most international city, Barcelona looks provincial and touristy in comparison, and because it is in the middle of the country with a superior high-speed rail network, nothing is much more than 2.5 hours away.”
Add top-quality restaurants, handsome architecture, some of Europe’s finest galleries and museums and year-round blue skies, and the case for a Madrid residence looks strong.
LOWDOWN ON DISTRICTS
Salamanca is the most prestigious and priciest district, packed with designer shops and wide boulevards built on a strict grid system. Lucas Fox has an elegant two-bedroom penthouse with wide private terrace in a classic building renovated to the highest standard for £1.1 million.
Justicia, north-west of the centre, is Madrid’s Chelsea: chic, international and in great demand. It includes the narrow streets and intimate boutiques of historic Chueca, as sought-after as Salamanca, but with a younger crowd. Lucas Fox has an attractive renovated one-bedroom apartment among the bars and restaurants for £258,400.
At the top of Grand Vía, Madrid’s main shopping street, 25 one-bedroom, loft-style apartments in a 32-floor tower start from £335,800. Monthly service charges, including 24-hour security and a communal gym, start from £220. Half are already sold, and would rent for £1,500 a month, says Jamieson.
Stamp duty is lower in Madrid than Barcelona, six per cent compared with 10, and property taxes are also lower.
Madrid is Spain’s economic hub, home to headquarters of international banks and businesses and Europe’s chief entry point to South America. Property search company Moving2Madrid (www.moving2madrid.com) has a client list that includes Santander Bank, RBS and the US Army.
“Anyone moving to Madrid wants to know how close they can be to good transport links, the metro, supermarkets, parks and gyms,” says Arash Palizban, of Moving2Madrid. “Salamanca and Chueca are most expensive, but there are other interesting options.”
He tips Lavapiés to the south as an up-coming, newly gentrifying district to watch, saying: “It is like Chueca in the Nineties with attractive buildings, though still with graffiti and peeling paint.” For somewhere more established, but still hip, he suggests Malasaña, west from Chueca.
A two-bedroom apartment, requiring renovation, starts from about £133,000 in Lavapiés and £162,700 in Malasaña.
Among the local craftsmen and busy bars of La Latina, home to the Sunday antique market El Rastro, a one-bedroom apartment over two floors rents for £590 a month. Palizban adds: “A rental budget of £740 would give you good choices across the city.”