Are you considering moving to Madrid? If so, this article can help you discern the pros and cons of Madrid vs. Berlin. We walk through both the economic differences between the two cities and lifestyle differences.
Economic factors
Housing markets
Berlin is currently in the middle of a major housing crisis. Although one can find housing, it is difficult. Many people are reportedly going from short term lease to short term lease, often living in very difficult situations. Looking at the numbers, it’s easy to see that that a big part of this problem is that rents are relatively low. Demand simply out strips supply. Simple economics tells us that when this happens, prices must rise to restore the market to equilibrium.
The housing markets in Madrid and Berlin are very different. Madrid has, on average, some of the highest rental rates in Europe. However, property prices are relatively reasonable. This makes it easier to purchase a home. And, even though rents are more expensive than those in Berlin, there is a larger supply of apartments on the market so the city doesn’t have the dire housing shortage that exists in Berlin.
The upshot of this is that if you are interested in property investment, Madrid is definitely the better option. This is because property prices are not only cheaper, but the rental yields in Madrid are much higher than those in Berlin. In fact, Madrid has some of the highest rental yields in Europe; of the cities we track, only Dublin has higher yields. To learn more about this, we invite you to read: What is the European city with the highest rental yield?
If you are an expat and need help finding an investment property in Madrid, we invite you to arrange a FREE CONSULTATION TODAY to learn how Madrid Estate can help you every step of the way.
Mortgage rates
As the European Central Bank begins cutting interest rates, getting a mortgage to finance a property purchase is becoming an increasing attractive option. Even if one has the cash to buy a property, leveraging the purchase allows one to increase their returns.
European interest rates differ across countries. This is because of the indirect correlation between inter bank lending rates and mortgage rates. Spanish rates are among the lowest in Europe. According to the Deloitte 2024 Property Index, Overview of European Residential Markets, the average mortgage rate in Spain is 3.1%, whereas the average mortgage rate in Germany is an entire percentage point higher: 4.1%. This makes it economically more attractive to purchase both a home or an investment property in Madrid than in Berlin.
Cost of living
According to the databases of Expatistan, the cost of living in Madrid is 18% cheaper than the cost of living in Berlin. Food, clothing and transportation are all cheaper in Madrid than in Berlin. The only thing more expensive in Madrid is personal care products; personal care products are items like pharmaceuticals and other items for sale at pharmacies.
Lifestyle considerations
In short, Germany and Spain offer very different lifestyles. Deciding between the two cultures ultimately comes down to personal preference, once you set aside economic factors.
Weather
Although both cities are inland, Madrid is much further south than Berlin, so the weather is definitely warmer. Madrid is also at a much higher elevation that Berlin; in fact it is the second highest city in Europe after Andorra la Vella.
Madrid is characterized by very hot, dry summers. It is also one of the sunniest cities in Europe. Winters can be cold, given the city’s elevation and that there are mountains to the north and west. Rainfall is minimal; especially in the summer.
Berlin has a more moderate climate, but does not get nearly as much sun as Madrid. And, it rains much more frequently. Most people consider Madrid to have the better weather of the two.
Quiet hours vs. late night clubbing
If you like nightlife, Madrid is your place. Its nightlife is legendary. There are options for everyone: tapas crawls on Calle Ponzano, wine bars, restaurants that often don’t get going until 10:30pm and the night clubs that stay open almost all night. And then after the night clubs close, there are after hours clubs. You can also go to a cannabis club, which are open to everyone. Even tourists can go to Madrid’s cannabis clubs.
What is important to take into consideration when purchasing a property in Madrid is the street on which it is located. We recommend, before purchasing Madrid real estate, to check out the neighborhood at night to see what the noise level is like. Some people are more tolerant to noises than others; if you are highly sensitive to noise, you want to make sure you don’t buy on a street that is very lively at night. Spaniards can, and do, party all night so things can get loud if you are in a very trendy area like Malasaña.
Although Berlin does have very good, diverse nightlife, it’s not the scene that Madrid is. Something that is also important to take into consideration are the German Quiet Hours. These are known as Ruhezeiten and are an integral part of life in Germany, designed to ensure peace and tranquility in residential areas. They are typically from 10:00 pm to 6:00 am on weekdays and all day on Sundays and public holidays. For example, you can’t mow your lawn or wash your car during quiet hours. Children cannot be loud, nor can you play loud music. The Quiet Hours are governed by local ordinances and are strictly enforced. If you violate them, you can (and probably will) be fined.
Dog ownership
Owning a dog in Madrid is fairly straightforward. It needs to be micro-chipped and have an up to date rabies vaccine. You also must clean up after it when taking it out for a walk. When walking your dog, it needs to be on a leash. However, you can let your dog off the lead in parks and gardens between 7:00 pm and 10:00 am (in winter) and between 8:00 pm and 10:00 am (in summer).
If you live in Berlin, there are a lot more rules surrounding dog ownership. In addition to the microchips and rabies vaccines (which are also required in Germany), you have to pay taxes on your dog. Before doing this you must register your dog in the Dog Register. After you do this, you then have to pay the tax, which is 120€ per year for one dog and 180€ per year for each additional dog.
When you walk the dog, it must be on a leash less than two meters long. It also has to wear a tag with your name and address and the tag you get when you pay the dog tax. There are dog parks where dogs can play without leashes. However, to do this you you need a dog handler certificate (Hundeführerschein). You can get it at certain dog schools; it costs 80€ to 100€. You must take a theory exam and a practical exam. In the practical exam, you must prove that your dog follows your commands. Your dog must be at least 15 months old.
Other rules and regulations
In short, there are a lot more rules and regulations in Berlin. Garbage must be sorted properly and taken out at certain hours. In Madrid you are only supposed to take your trash out at certain times, but this is almost never enforced. In Berlin, and Germany in general, the general population believes in the role rules play in an orderly society, so often your neighbors will say something if you don’t follow the rules.
Punctuality is extremely important to Germans. They arrive on time to appointments, and usually early. It is considered very rude to be late to an appointment. In Spain, lateness is the norm. It is not uncommon for Spaniards to arrive over an hour late to appointments, even business meetings.
Conclusion
If you are looking for an investment property, Madrid is the better choice as it has much higher rental yields. However, if you are very noise sensitive and don’t mind the rain and grey skies, Berlin could be a good option.
Do you need help finding an investment property in Madrid? Madrid Estate offers a full array of real estate services in Madrid. We can help you find a property that will produce a rental return well above average and help you manage that property. Arrange a FREE CONSULTATION TODAY to learn how we can help you.
