Renting

24%

Cooperative

5%

Social/Public

2%

3 Things about the city you might not know....

1. Hidden Historical Gems: While many are familiar with iconic landmarks like the Royal Palace and the Prado Museum, Madrid is home to lesser-known historical sites, such as the Temple of Debod, an ancient Egyptian temple that was gifted to Spain in 1968, and is uniquely situated in a city park, offering stunning sunset views. 2. Culinary Secrets: Beyond tapas and paella, Madrid boasts a thriving underground culinary scene with unique food markets like Mercado de San Miguel and Mercado de Antón Martín, where you can find not only traditional Spanish cuisine but also international delicacies and innovative dishes from up-and-coming chefs. 3. Literary Legacy: Madrid has a rich literary history that extends beyond famous authors like Cervantes and Lorca. The city hosts a unique "Literary Quarter" in the Barrio de las Letras, where visitors can find plaques dedicated to authors who lived in the area, and there are even annual events like the "Night of the Books," celebrating literature with readings, book fairs, and special activities throughout the city.

Housing Market

In Madrid, the housing market in mid-2025 is characterized by surging prices and high demand. Approximately 40% of homes are rented, while 60% are owner-occupied, reflecting a growing preference for renting due to affordability challenges. The median price to buy an apartment in Madrid is about €6,021 per square meter, following an annual increase of nearly 38%. The median monthly rent has climbed to €25.10 per square meter, with affordability worsening and rents rising by nearly 10% year-on-year. Publicly owned housing plays a minor role in Madrid, making up only about 2.5% of the total housing stock, far below the EU average. In Spain, social housing (known as Vivienda de Protección Pública or VPO/VPP) can be either publicly or privately owned, but most is privately owned with regulated prices and allocation. Public housing refers specifically to publicly owned dwellings, whereas social housing includes all homes with official protection, regardless of ownership. Thus, in Madrid, public housing is a subset of social housing; they are not synonymous. New development of affordable homes is limited, with local authorities introducing only around 3,000 affordable rental units by mid-2025—insufficient to meet demand. This ongoing shortage, combined with strong investor and international interest, is sustaining price pressures and contributing to the city’s housing crisis.

Housing Crisis

Madrid’s housing crisis in 2025 is defined by **persistently high prices, insufficient supply, and worsening affordability**. Home prices have surged citywide, with the average residential price around €4,290 per square meter and prime districts exceeding €6,000-8,000 per square meter. Rents in central areas for a two-bedroom apartment average €1,800-€2,600 per month, and even peripheral districts now see monthly rents from €1,300 to €1,550. Rental prices have soared by over 15% in 2024 alone, far outpacing inflation and wage growth. **Supply shortages are severe**, with fewer than 100,000 new homes delivered annually nationwide—well below demand. Construction bottlenecks, limited land, and slow permit processes amplify the shortage. **Demand is pushed up further by strong population growth, international investor interest, and sustained inflows of foreign residents** seeking both rentals and property purchases. **The crisis hits young people especially hard**. Many cannot afford to leave their parents’ homes as rent can absorb half of a typical salary, while stagnant wages limit access to both the rental and sales markets. Other vulnerable groups include low-income families, immigrants, single-parent households, and middle-class workers whose incomes no longer match housing costs. Publicly owned housing is marginal, comprising only a small share of the total stock. In Madrid, access to affordable homes remains highly constrained, resulting in widespread economic pressure, delayed household formation, and a growing divide between wealthy property owners and struggling renters.

Local programs

Madrid’s current administration is responding to the affordable and sustainable housing crisis through a mix of national and city-level policies and projects. The Spanish government recently announced 12 new measures prioritizing increased housing supply, improved regulation, and greater financial aid, with a focus on vulnerable groups and youth. There is a €10 billion national mobilization plan for housing until 2025, channelled into actions like the State Housing Plan, youth rental vouchers, and the Affordable Rent Plan. Key city-level initiatives include the Madrid Nuevo Norte project, the city’s largest urban regeneration scheme, which plans for 10,000 new homes—20% designated as social housing—with a strong emphasis on green spaces and energy efficiency. Madrid is also advancing support for cooperative housing, promoting non-speculative, right-of-use models as affordable alternatives, supported by land transfers, improved regulation, and new financing channels. Additionally, measures such as tax incentives for landlords who rent at reference index prices, and property renovation grants to convert empty units into social housing, are being rolled out. Administrative processes for development and licensing have been streamlined to accelerate new home construction. While these efforts indicate a tangible policy shift, current targets—like 3,000 new affordable rentals citywide—remain modest relative to demand. Madrid’s approach now increasingly integrates sustainability with affordability to address the city’s housing challenges.

Cooperative Housing

In Madrid, cooperative housing is emerging as a viable alternative to traditional ownership models, particularly due to its affordability and participatory nature. While specific figures on the share of cooperative housing in Madrid are not readily available, these cooperatives are gaining traction as a solution to the city's housing crisis. The sector is developing with support from local and national policies, including access to subsidized loans and promotional activities by organizations like CONCOVI. Madrid's strategy to promote cooperative housing includes facilitating access to public-backed loans and implementing policies that support non-speculative models of housing. The city is also exploring new financing channels and regulatory improvements to encourage cooperative development. However, despite these efforts, the dominant trend remains a market driven by private ownership and rental models, with a significant shortage of affordable housing options. Cooperative housing, while growing, still represents a small fraction of the overall housing landscape in Madrid.