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What is Happening on Madrid’s Real Estate Market in 2020?

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Written by Daniella

Spain is one of the safest countries to invest in when it comes to real estate, which is why many foreign investors decide to acquire property in our country. They do so in every important Spanish city, like for example Madrid and Barcelona.

So this raises the following question: Is now really the right time to buy your (first) home and invest all of your life savings? Today’s article by ShMadrid will highlight 2020’s real estate market, and whether you should consider buying a house or apartment this year.

Related article: 3 Real Estate Trends in 2020

What is Madrid’s real estate market like in 2020?

Madrid is one of the most touristic cities in Spain, and lots of foreigners choose the city to start a new life, or to visit the capital every now and then. The year 2020, however, may not be the best time to invest in your new home for several reasons.

buildings with street in between

Photo via Pixabay

Property prices – both when renting or buying – have skyrocketed, especially when you compare these prices to Madrid’s average salaries. In addition to this, it is impossible for Madrid to expand any more than it already has. If you would like to buy a house in Madrid, it is therefore wise to wait just a little longer, because prices simply are too high at the moment.

This also means that, if you were thinking of buying property as an investment, the situation on the real estate market is complicated, because prices may not rise any further. A good conclusion would be to say that there is too much uncertainty on Madrid’s housing market in 2020.

When it concerns younger and first time potential home owners, prices should be good enough to persuade them to take that first step on the real estate market. In the last few years there was an increase in newly built homes, but unfortunately this is not the case for this year. The motivation to invest in the construction of new homes has vanished…

Young people want to be independent and buy their first home, but the real estate industry has not yet worked on a solution to make this possible. And this is exactly what should be done: create options for a large group of young people, who have low salaries, little savings and cannot yet afford the costs of owning a house.

Related article: 5 Real Estate Challenges for Madrid in 2020

Property developers in Madrid and other Spanish cities should work on offering more affordable housing, while the financial sector should explore how young people can finance  a first mortgage and the costs that come with it.

neighbourhood with clouds above

Photo via Pixabay

In many cases people can afford monthly mortgage payments, but they just don’t have the 20% down payment in their savings account that is needed when buying property. And although it is complicated, it is not entirely impossible… Because what if there were different approaches to meeting young people’s demands?

For example: offering different ways to pay for mortgage entrance fees, using different construction techniques to reduce building times and costs, offering different fiscal options, controlling real estate prices, etc. But first and foremost, political stability is needed, because measures will only be effective for a longer period of time if new homes are being built, employment opportunities improve and the economy grows.

After all we have previously mentioned, we can say that the safest investment right now is the luxury real estate segment. The city has many interesting places for foreigners to stay at, like apartments that are only a few minutes away from the city centre or that are conveniently located near the airport.

Besides these key features, Madrid’s real estate is, of course, also worth investing in for the following reasons: good climate, good quality of life, economic stability, many cultural and leisure options, low cost of living (compared to their home country or city), residential projects by prestigious architects, and square meter prices that are lower than in other European cities, like London and Paris.

How would you positively influence Madrid’s real estate market in 2020?

About the author

Daniella

Daniella loves to write and translate. Her bucket list is filled with beautiful places she still needs to visit.

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