Best up and coming Madrid neighborhoods for real estate investment

The Madrid real estate market performed extremely well in 2017 and the first half of 2018. Prices increased 28.7% from 4Q2016 and 2Q2018, which means we have seen a 39% increase since 2014. The question people are asking is, “Are we in a real estate bubble?”  The short answer is no. However, even for those afraid of high prices in the center, there are still some Madrid neighborhoods where really good values can be found.

Madrid neighborhoods

Some neighborhoods, such as Salamanca, Chamberí and the Center, have seen prices surpass pre-crisis levels. Most neighborhoods in the tourist friendly Center, which is popular for those wanting to list their properties on Airbnb, have been picked over, so there are no bargains to be found. However, as happens in prime real estate markets, surrounding Madrid neighborhoods are becoming increasingly popular and attracting real estate investment.

Our recommondations for up and coming Madrid neighborhoods

There are three neighborhoods which still have some interesting finds. Buyers that are willing to sacrifice a bit of return for lower risk can still find good properties in La Latina. This is still technically in the center, but pricing has lagged a bit behind trendy Malasaña and tourist filled Sol. Property investors that are willing to take on a little more risk for increased return can find some really interesting properties in Arganzuela, which lies directly to the south and southeast of La Latina and Pacifico, which lies to the south of El Retiro park, but is still located in the administrative district of Retiro.

Madrid neighborhoodsConfused about Madrid real estate pricing? Want to learn more about pricing history or where the market is headed? Contact us today to get all your questions answered.

La Latina

This is the oldest Madrid neighborhood. It has lovely patios nestled in the shadows of stately domed churches.  It also contains one of the best streets for tapas in Madrid (Cava Baja) and is the location of La Paloma, arguably the best festival in Madrid. In mid-August, there are processions and people wear traditional dress to honor Our Lady of the Doves. But it’s not just about religion- during the evening bars set up shop in the streets, DJs play in the open air and the entire area around Plaza de la Paja, Plaza de las Visitillas and Calle Toledo turns into a giant (mostly civilized) party.

Madrid neighborhoods

Plaza de la Paza is one of the best places to enjoy one of Madrid’s outdoor terraces

Arguably, the heart of La Latina lies between Plaza de la Paja (Straw Plaza) and Plaza Cebada (Barley Plaza). During medieval times, this was where farmers bought and sold barley and straw. Now, the streets are lined with excellent bars and restaurants. Juana la Loca, located across the street from the gorgeous Iglesia de San Andrés, is widely considered to have the best tortilla in Madrid (and this author agrees).

Madrid neighborhood

This secret garden, created in 1750, sits at the edge of Plaza de la Paja. La Latina has a number of small, secret gardens like this.

There is a good deal of pricing variation in La Latina. If you’re looking for a cheaper place in a high end neighborhood, we recommend looking in the southern part of the neighborhood. This area is a 10 minutes walk from Plaza Mayor, so your property will be very appealing for tourist rentals.


South of La Latina lies Arganzuela. La Latina merges slowly into this neighborhood, so it is often hard to tell where one ends and the other begins unless you look at a map. The architecture is traditionalal 19th and early 2oth century. One of the most interesting examples is the Atocha railway station, where the high speed trains depart from.

Arganzuela is more ethnically diverse than the rest of Madrid, so if you are a fan of Indian, Thai and other interesting cuisine you will likely find yourself here.

The area has a number of interesting sites. These include El Matadero, Madrid’s Contemporary Art Center, the Madrid Planetarium and Madrid Rio- a park lining the River Manzanares. Football fans will be very interested in Vicente Calderón Stadium, home of Atlético Madrid.

Prices in Arganzuela are, on average, 21% below those of the center of Madrid, making for some very attractive finds. If you’re interested in the short term rental market, we recommend looking a few blocks from Atocha, the main train station.

HIgh speed trains pulling into Atocha RENFE. Spanish high speed trains are as fast as the Japanese bullet trains.



Pacifico lies to the east of Arganzuela, and sits right below the Retiro. El Retiro is a fusion of NYC’s Central Park, London’s Kew Gardens and the Gardens of Versailles. It contains baroque fountains, beautiful French style gardens, secret green hideaways and art filled pavilions. The largest of these is the Crystal Palace.

Madrid neighborhoods

The Crytal Palace in Retiro Park- beautiful even in the winter

Another interesting site is the Royal Fábrica de Tapices.  It was built in 1721 by King Felipe V to manufacture luxury tapestries. These often included collaberations with famous artists such as Goya. Today it is a museum, workshop and event space. It has some beautiful outdoor spaces. Further south in Pacifico there is a large mall at Ménendez Pelayo with an El Corte Inglés and other fashionable shops. It is a very liveable area, compared to the center, with lots of grocery stores and family friendly spaces.

Madrid neighborhoods

Inside the Real Fábrica de Tapices

As this area is close to both the Retiro and Atocha train station, it is another great option for those looking to list their properties on Airbnb. Prices tend to get cheaper the further one ventures from El Retiro.

Airbnb Tip

Are you planning on buying a property in one of these Madrid neighborhoods and listing it on Airbnb? If so, you should know that the laws are scheduled to change in 2Q19. At that time, people renting apartments for more than three months per year will need to obtain a special license. Properties listed before this time will not be required to obtain licenses. Therefore, we recommend that you start a property search now so you can purchase in 1Q19 (or before)!

Need help understanding the pricing variation and finding your ideal property in one of these Madrid neighborhoods? Arrange a free consultation today to speak with one of our Property Shoppers.






Posted on 2 September, 2018 by Admin in Invest, New? Start Here


2 responses to “Best up and coming Madrid neighborhoods for real estate investment”

  1. […] like the Center and Salamanca, saw small increases in rental prices. This was also true in select up and coming neighborhoods like […]

  2. […] bedroom apartment within the M30, which is technically in the Center. We recommend looking in an up and coming neighborhood like Arganzuela. You also can find something in Tetuán, although it is likely to be a very small […]

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