Whether you are looking to purchase a second home or seeking an excellent investment opportunity outside the UAE, Madrid is the top European city for Dubai based investors. Keep reading to learn why Madrid is so appealing to Dubai based investors and to see our recommendations for purchasing both second homes and investment properties.
Old world charm
As everyone knows, Dubai is the most modern, vibrant city in the world. It offers unparalleled luxury at price points attainable for many people. It’s a very new city, engineered for modern life. However, it doesn’t have that old world charm that many people crave.
Madrid, on the other hand, is a classical European city. It’s beautiful architecture is a commingling of many styles. Gothic, Renaissance, Baroque, Neoclassical and Modernist styles coexist, providing a rich visual and cultural experience. Buildings like the Prado Museum and the Royal Theater are not only architecturally significant but house world-renowned art collections and produce stunning cultural events.
Madrid vs. Paris
Many people from the UAE have second homes in Paris, although the city has become increasingly expensive. Post Brexit, it has the most expensive real estate in Europe. According to the Deloitte 2024 European Property Index, the average price of property in Paris was 14,900€ per square meter. In Madrid, it averaged 5,462€ per square meter.
Madrid prices have trended up in recent years, but there are still ample opportunities for capital appreciation via real estate investment. It’s a very attractive place to have a second home; you can stroll through tree lined streets, enjoy a coffee on an outdoor terrace or go for a tapas crawl on the vibrant Calle Ponzano.
In the words of our Founder, Fabiana Greci,
“Madrid is a cheaper version of Paris.”
The city of Madrid is booming
The past few years have seen a renaissance in Madrid; the city is definitely “having a moment.” As The Economist wrote last year,
“Now Madrid is having a moment. Tourists are flocking, as well as would-be residents. They include Americans fleeing toxic politics, northern Europeans seeking an easy-living big city, and, most of all, Latin Americans. Some come to work in construction, care or hospitality. Others are rich Venezuelans and Mexicans fleeing confiscatory populism. The foreign population has grown by 20% since 2016.'”
As a result, the city has seen a flood of new restaurants, cafes, bars and cultural events. According to the 2025 Michelin Guide, the city now boasts 28 restaurants with Michelin stars. DiverXO tops the list with three stars. Deessa, Smoked Room, Paco Roncero, DSTAgE and Coque all have two. Last year alone the city added five new additions: VelascoAbellà, Pabú, Gofio, Chispa Bistró and Sen Omakase.
The city hosts top names in music. For example, last year the city hosted two nights of Taylor Swift’s Eras Tour in the the renovated Estadio Santiago Bernabéu, the home of Real Madrid. And there’s more to come: Madrid will host Spain’s first NFL game this year before it snatches the Spanish Grand Prix from Barcelona in 2026. The 2026 Spanish GP will be held in the area of Campo de las Naciones, which is within Madrid’s municipality but roughly 18.6 miles northeast of the city center. The circuit will be a hybrid 3.4 mile track with 20 corners, all of differing speeds.
Madrid ranked second in Price Waterhouse Coopers’ Emerging Trends in Real Estate: Europe 2025 report.
Since Madrid is seeing so much new investment, we recommend buying property before it’s too late. Price Waterhouse Coopers recently ranked the city Number 2 in its ranking of European cities most favorable for property investment.
“Both macroeconomic and microeconomic factors, alongside a high quality of life, have drawn real estate players to Madrid, continuing its seemingly inexorable rise from eighth in 2020 to second place this year.”
Quick flights to other western European cities
Fancy a post Ramadan shopping trip to London or Paris, or a summer trip to the French Riviera? Madrid is a quick 2-2.5 hour flight from most western Europe cities. The country also has excellent roads and high speed trains if you want to travel within Spain or even take the overnight train to Paris.
Cultural similarities
For almost 800 years, Spain was ruled by the Moors. The Moors were Arabs from North Africa. Joined by the Berbers (people indigenous to Morocco), in the year 711 they crossed the Strait of Gibraltar and established a new Islamic state in the region, which became known as Al-Andalus. They went on to establish the Caliphate of Córdoba, which was recognized as a legitimate Islamic caliphate by other Muslim rulers. The Moors conquered most of the Iberian peninsula, with the exception of the north.
Because Spain was ruled by the Moors for so long, there are many aspects of Spanish culture that are very similar to Arabic culture: dinners run late, family is the most important thing, time can be fluid and people are often very social.
Spain is filled with beautiful examples of Islamic architecture and Mudéjar architecture (a fusion of Islamic, Romanesque, Gothic and Renaissance architecture).
The Casa Árabe, which houses the Arabic Cultural Center in Madrid, is a perfect example of this Mudéjar architecture. The Casa Árabe, located in the neighborhood of Salamanca, is the strategic center for Spain’s relations with the Arab world. It also has an Arabic language center, many special exhibits highlighting facets of Arabic culture and Arabic film screenings.
European residency options available
Even though Spain, along with most other European countries, is mothballing its golden visa program, there are many options for people to gain European residency if they live in Spain. Spain has digital nomad visas, entrepreneur visas and non-lucrative visas. All of these give one the option to travel visa free in the Schengen Area, which includes most European countries.
Second home or investment property?
Now that we have detailed some of the features that make Madrid the top European city for Dubai based investors, we will walk you thought some of our favorite investment opportunities. Madrid has excellent options for all types of buyers. Due to its high quality lifestyle it is an excellent place for a second home. If you are looking for a high yielding investment property, there are also excellent options.
Best neighborhoods for second homes
The neighborhoods in Madrid are quite different. The exclusive neighborhoods of Salamanca and Chamberí are the best for those looking to find fully renovated, luxury properties. Both neighborhoods are very exclusive residential neighborhoods, much quieter than the neighborhoods in the very center of Madrid. Salamanca is where Recoleteos is located. This “sub-neighborhood,” located to the north of the lovely Retiro Park, houses the most coveted, and expensive, in Madrid. Salamanca is an international neighborhood, filled with diplomats and high net worth individuals. The most exclusive shopping in Madrid is found along Calle Serrano and especially Calle de José y Gasset.
Chamberí is more traditionally Madrileño than Salamanca. It is very livable because there are many large supermarkets (harder to find in Salamanca), parks and options for children. It also houses Calle Ponzano, the most popular street for tapas, and the delightful Plaza Olavide. This is a circular shaped plaza, lined with terraces and filled with trees, fountains and places for children to play.
Because these neighborhoods are so desirable, real estate prices have trended up strongly in recent years. We and other experts expect this trend to continue. Thus, they are excellent neighborhoods in which to invest for capital appreciation and capital preservation. However, this increase in real estate prices has compressed rental yields, thus there are better neighborhoods if you are looking for a high yielding investment.
Best neighborhoods for investment opportunities
As we have mentioned in other articles, Tetuán is an excellent neighborhood if you are looking for a property that will fetch a high rental yield. This once working class, immigrant neighborhood is now one of the trendiest neighborhoods in Madrid. It is an ideal location to purchase a large property, renovate it and rent it medium term to students. Rental yields in Tetuán are some of the highest in the city center (and in Europe). Another neighborhood with high rental yields is the up and coming Madrid Río neighborhood. This is the area surrounding the vast leisure and cultural stretch that runs parallel to the River Manzanares. This area has been re-wilded and is lined with various recreational and culture facilities, including 17 play areas and fountains in which kids can play during warm summer days.
Are you a Dubai based investor looking to learn more about the Madrid property market? If so, you can email our founder, Fabiana Greci, directly at fabiana@madrid-estate.com, or contact her via WhatsApp at +34 680 30 63 37. Alternatively, you can book a free appointment with her directly through her meeting scheduling app: Book Meeting with Fabiana
