Madrid vs Valencia: Where to buy real estate and where to invest?

When it comes to real estate in Spain, two gems stand out against this picturesque backdrop - Madrid and Valencia. Each of these cities offers something special for potential investors, but where is it more profitable to invest? In this article we will talk about the intricacies of the Madrid real estate market and Valencia and find out what to look for when choosing a place to buy a home.

Madrid and Valencia are cities that need no introduction. They beckon investors and those who dream of a home under the Spanish sun. This article will help you make an informed choice and allocate your investments correctly. The main thing is to understand exactly what you need.

Real estate market analysis in Madrid

When we talk about Madrid, we imagine a pulsating city with a rich history and a modern look. It is one of the most attractive cities for investors in Spain, where different neighborhoods offer a variety of styles and prices.

Current state of the market

The real estate market in Madrid is showing steady growth. Despite global instability, demand for real estate here continues to grow. Average cost per square meter range from 3,500 to 6,000 eurosand that's impressive. The city center and its surroundings are particularly sought after.

Popular neighborhoods for buying real estate

1. Chueca - is the heart of Madrid's fashion scene. Conveniently located and uniquely eccentric, it attracts young people and creative professionals.
2. Salamanca - an upscale neighborhood known for its luxury boutiques and high real estate prices. It has become a symbol of wealth and high-end lifestyle.
3. Malasiana - For those who want to be in the center of things, the old streets and unique architecture make this neighborhood attractive.

Price dynamics in recent years

Prices in Madrid are steadily rising - by an average of 5-7% annually. This is due to the influx of investors from abroad and improved infrastructure. Many buyers, including foreigners, see this as an excellent investment prospect.

Factors affecting supply and demand

The Madrid market is influenced by several key factors:

• Economic stability - Spain, and especially Madrid, are actively growing to offer a variety of jobs.
• Infrastructure - improved transportation system and the development of new neighborhoods are attracting more and more buyers.
• Cultural events - a city with a rich cultural life always attracts investors. Exhibitions, conferences and festivals make it a center of attraction not only for tourists but also for potential residents.

Madrid is a city where everyone can find something different. From fashionable living in Chueca to high-end shopping in Salamanca, it offers opportunities for every dream and ambition.

Real estate market analysis in Valencia

Valencia, with its unique Mediterranean charm, attracts the attention of investors by combining the comforts of city life with the relaxation of a beach vacation.

Features of the real estate market in Valencia

Valencia's real estate market is renowned affordability and stability. Average cost per square meter ranging from 2,000 to 4,500 euros. From 2024-2025, prices are expected to rise steadily due to the improving economic situation and the city's growing popularity among foreigners.

Main areas for investment

1. Roussafa: This neighborhood is becoming increasingly popular due to its rave reviews of local culture and festivals. The average price per square meter ranges from 2,500 to 4,000 euros. Russafa is ideal for young people and creative professionals.
2. Canabal: Attracts those looking for a life by the sea. There is a sense of tranquility here and the property values are 2,200-3,700 euros per square meter. This is an ideal place for families and those who appreciate proximity to the beach.
3. *Benihar": For those who prefer a traditional atmosphere, this neighborhood offers homes priced at 1,800 and 3,200 euros per square meter. Here you will find more tranquility and traditional Spanish life.

Price trends

Real estate prices in Valencia are steadily rising, showing annual increases in the range of 4-6%. This is due to infrastructure development and improved quality of life, making the city attractive to both investors and residents.

Impact of economic and social factors

• Economic development: Valencia supports small and medium-sized businesses, which helps create jobs and attract migrants from other parts of Spain and Europe.
• Social life and culture: Rich cultural programs and vibrant festivals make Valencia attractive to young people and students. It is a city where there is always something to do and explore.
• Convenient logistics: Valencia's expanded transportation system, extensive public transport network and modernized airport make it convenient for living and business.

Valencia is becoming not only a vacation destination but also a promising destination for investment opportunities, offering an attractive balance between cost and quality of life.

Comparison of key factors for investment in Madrid and Valencia

Investing in real estate is a big decision, and it's important to consider all the pros and cons so you don't make a mistake. Let's look at the key factors to consider when choosing between Madrid and Valencia.

Factor	Madrid	Valencia
Return on investment	High profitability due to rent. Average rental rate: 18-25 euros per square meter per month.	Available lease options. Average rental rate: 12-16 euros per sqm, compensated by low purchase price.
Real estate liquidity	High liquidity, quick resale, less risky investments.	Liquidity is lower but popularity is growing, a promising market for long-term investors.
Risks and opportunities	High competition, high start-up costs; stable economy and infrastructure reduce risks.	Lower start-up costs, less competition; changes in tourism may affect the market.
Target audience of tenants	Attracts professionals, students and expats; suitable for luxury and business apartments.	Of interest to tourists, students and families; ideal for investors looking for a stable, budget investment.
Price per 1 sq.m. on average	3,500-6,000 euros	2,000-4,500 euros
Formalization	Complicated, requires lawyers and a long process to get an NIE	It is easier, especially for foreign investors, to support local agencies
Tax on the purchase of real estate	8-10%	10%
Real estate ownership tax, per year	0,4-1,1%	0,4-0,9%
Payback	Fast due to high demand	Slower, but stable
Rent per day, average	60-100 euros	50-80 euros
Profit per year, on average	5-8%	4-6%
Annual growth of tourists	High, due to business and cultural tourism	Sustainable, at the expense of beaches and festivals
Real estate price growth per year	4-7%	4-6%

So the choice between Madrid and Valencia depends on your investment goals and priorities. Madrid will suit those looking for a quick transaction and high returns, while Valencia is for those who like more affordable and stable investments.

Nuances when buying a home in Madrid and Valencia

Purchasing real estate in Spain will require an understanding of the legal aspects and local intricacies. Let's see what to look out for in each city.

Peculiarities of transaction execution

Madrid: Making a purchase here involves careful preparation. Notary services cost about 0.1-0.5% of the object valueIt is worth taking this into account in the budget. Housing loans are traditionally more accessible to residents, but foreigners can also qualify for financing if they provide the necessary documents and deposit.

Valencia: The process in Valencia is somehow easier due to the smaller number of applications for the same properties. The deposit in 10% The cost of notary fees is similar to Madrid's rates, while rent and utilities are generally cheaper. However, rent and utilities are generally cheaper here.

Restrictions for foreigners

Madrid: Foreigners are required to complete the transaction NIE. The procedure to get it can take several weeks, so it's best to start early. It is also important to take into account taxes on the purchase of real estate, which can amount to 8-10% of its value.

Valencia: Agencies offer expedited registration services NIEThis can be convenient for those who are in a hurry to buy. Housing up to 100,000 euros is subject to lower taxation, which can be an advantage for budget investments.

Recommendations for site selection

Valencia: The age of the building is an important factor for Valencia, especially in the center. New residential complexes are often offered slightly more expensive, but they pay for themselves through lower repair costs and a better standard of living.

Madrid: For investors aiming for quick resale, areas with convenient transportation accessibility are key, such as Chueca and Salamanca. Here it is also important to examine the potential for price increases and the level of criminality.

Legal support

Without legal help, both purchases in both cities can be complicated. A lawyer will be able to verify the legitimacy of the transactionhelp in verifying all documents and ensure that there are no hidden legal problems. The cost of his services is 1,000 to 3,000 euros depending on the complexity of the deal.

Prospects for growth and development of resort real estate in Madrid and Valencia

Both cities are distinguished by their investment prospects in resort real estate, tourist attraction and infrastructure development.

Trends in tourism development in Madrid and Valencia

Madrid:

• Cultural and business tourism: the capital attracts a huge number of tourists interested in culture and history. More than 10 million visitors visit the main attractions every year. This supports a steady demand for short-term leasesIdeal for investment in apartments and hostels.
• Infrastructure projects: the city is actively modernizing transport hubs and developing new business centers. This makes it more convenient for business travelers.

Valencia:

• Beach and ecotourismIt is famous for its beaches and national parks, attracting a huge number of tourists seeking a vacation in nature. The peak tourist season is in summer, when hotels and apartments are filled to capacity. 90%.
• Development of maritime infrastructure: Valencia is actively developing ports and marinas. This contributes to the growing interest in luxury real estate on the coast.

Impact of infrastructure projects

Valencia:

• A new streetcar line: will improve connectivity between key areas and the coast. This will attract tourists to less developed areas, increasing their investment attractiveness.
• Airport expansion plans: will strengthen international ties, which will increase the number of direct flights and, consequently, tourists.

Madrid:

• Subway expansion: the new lines will improve transportation accessibility to suburban areas, which will have a positive impact on property values in these areas.
• Transportation hubs: modernization of airports and railway stations, which attracts business visitors and increases the flow of tourists.

Price growth forecasts

Both cities are projected to have a steady price increase of 4-7% annually in the coming years, making real estate investments very promising. Madrid will continue to attract business travelers, while Valencia will become an ideal destination for vacationers.

So, choosing between these cities should be based on your investment goals and lifestyle preferences. Each place offers its own unique features and advantages.

Yield from short-term and long-term rentals in Madrid and Valencia

Renting is one of the main sources of income from real estate investments. Let's see what prospects Madrid and Valencia offer.

Rental yields in Madrid

Short-term rentals: Madrid is a center of business and tourist activity. Apartments here are often rented through platforms like Airbnb. Average yield reaches 5-8% per yearThis makes it an attractive destination. The cost of short-term rentals starts from 60-100 euros per night depending on location.

Long-term lease: In Madrid, long-term rentals are in demand among expats and students. Average monthly rental rate amounts to 18-25 euros per square meter. This provides a steady income, especially in areas with good transportation accessibility.

Rental yields in Valencia

Short-term rentals: Valencia's tourist appeal and its beaches make short-term rentals profitable. Average yield amounts to 4-6% per yearand rental prices start at 50-80 euros a night. In the summer, housing occupancy reaches nearly 90%.

Long-term lease: Many families and students prefer Valencia because of its lower housing prices. Average rental rate here is 12-16 euros per square meter per monthThis makes it affordable and, at the same time, profitable in the long term.

Factors affecting profitability

Madrid:

• High demand for transportation accessibility: Facilities near subways and public transportation are in high demand.
• Economic activity: Business development is contributing to a steady influx of tenants.

Valencia:

• Beach season: High demand during the summer increases short-term rental rates.
• Price and quality of housing: Investments in modernization and renovation can significantly increase profitability.

Economy and Life: Madrid vs Valencia

Both capital cities are economic centers, but each offers its own unique atmosphere and lifestyle that may influence your investment choice.

Standard of living

Madrid:

• Comfort and prestige: The capital offers a high standard of living, combining a vibrant culture with an abundance of jobs. The average income per person is higher here, making it attractive to professionals and business people.
• Variety of entertainment: Madrid is famous for its restaurants, theater and nightlife. It is a city where there is always something to do, from museums to soccer matches.

Valencia:

• Mediterranean lifestyle: It has a more relaxed atmosphere with an emphasis on proximity to nature and the sea. Cost of living on 20-30% belowThis makes the city more accessible to young people and families.
• Community and culture: Valencia offers a rich competitiveness of festivals and street events, including the famous Las Fallas festival.

Cost of living

Madrid:

• Rental cost: High, especially in central areas. Average rental cost range from 1,200 to 2,500 euros per month.
• Prices for goods and services: Here they are slightly higher, but in line with salaries and offers.

Valencia:

• Affordable housing: The average rent is as follows 800-1,500 euros per month, making life in the city more economical.
• Prices for goods and services: They are significantly lower, allowing residents to enjoy quality living without spending a lot of money.

Economic stability

Madrid:

• Investment opportunities: As a capital city, Madrid attracts large international companies, which contributes to economic growth and stability.
• Diversified economy: This makes the market resilient to crises and fluctuations.

Valencia:

• Growth of small and medium-sized businesses: The economy is entrepreneurial-oriented, which contributes to job creation.
• Tourism and agriculture: These sectors continue to play an important role in supporting the economic stability and development of the city.

To summarize, the choice between Madrid and Valencia depends on your personal priorities and lifestyle. Madrid offers more career and business opportunities, while Valencia offers a relaxed atmosphere and natural beauty.

Education and medicine: Madrid vs Valencia

The quality of education and medical services are key factors when choosing a place to live. Madrid and Valencia offer unique advantages in these areas.

Quality of education

Madrid:

• World-class universities: Madrid offers some of the best educational institutions in Spain, including the Complutense and the Autonomous University. Studying there attracts international students, which increases cultural exchange.
• International schools: Prestigious international schools with programs in English are available for expats. Average tuition fees at these schools range from 8,000 to 20,000 euros per year.

Valencia:

• Accessible and quality education: The University of Valencia and the Polytechnic University of Valencia offer high quality programs, especially in engineering and medicine.
• International schoolsThey are smaller than those in Madrid, but they also provide quality training. Tuition prices start from 6,000 euros per year.

Medical services

Madrid:

• Developed medical infrastructure: The city offers a large number of hospitals and medical centers of European level. Private health insurance here costs from 50 to 200 euros per monthdepending on the service package.
• Specialized institutions: Madrid is known for its specialized clinics in cardiology and oncology, making it attractive for medical tourism.

Valencia:

• Quality and affordable healthcare: The public medical system here is one of the best in Spain. Basic medical services are available free of charge to residents.
• Private medical care: Cheaper than in Madrid, the cost of insurance starts from 40 euros a month. Valencia is famous for its rehabilitation and physiotherapy centers.

Accessibility for expats and locals

Madrid:

• Wide selection: Many services are in English, making integration easier for expats. A network of tutors and language courses is available to help with adaptation.

Valencia:

• Friendly environment: Locals often speak English, making it easier for foreigners to adapt. The urban community actively promotes the integration of newcomers.

As a result, Madrid offers higher standards of education and medicine due to its extensive infrastructure and international connections. Valencia, on the other hand, offers more affordable services without losing quality, making it a good choice for families and those seeking tranquility.

Roads and transportation: Madrid vs Valencia

Transportation infrastructure is a key aspect when choosing a city to live or invest in. Madrid and Valencia offer different transportation options.

Developed transportation infrastructure

Madrid:

• Metropolitan: One of the most extensive metro systems in Europe with more than 300 stations. Fare starts at 1.5 euros per trip. This makes getting around the city fast and convenient.
• Bus network: A wide network of urban and intercity routes. Night buses provide transportation at any time of the day.

Valencia:

• Subways and streetcars: A compact and efficient system covering key areas. Tickets cost from 1.5 eurosand season tickets significantly reduce travel costs.
• The buses: The bus network is well developed, covering even remote areas. This makes Valencia convenient for residents of smaller suburbs.

Traffic and logistics

Madrid:

• Traffic: Due to its high population density, Madrid often faces congestion, especially during rush hours. However, smart technology and constant modernization of the transport system help to reduce them.
• Logistics: The City is actively pursuing innovative solutions to reduce congestion, including carpools and smart traffic signals.

Valencia:

• Less traffic: Valencia faces fewer traffic congestion problems due to its smaller area and population. Bicycle lanes and walking routes make the city convenient for eco-friendly travel.
• Availability of parking lots: It is easier and cheaper to find parking here than in Madrid. The average cost is about 1-3 euros per hour in the center of town.

Prospects for improvement

Madrid:

• Electric transportation: Plans to launch additional lines for electric buses and expand charging stations for electric vehicles.
• Development of railroad infrastructure: Improvements to commuter destinations are expected to increase speed and comfort of travel.

Valencia:

• Streetcar lines: Their expansion will improve connectivity to beach areas and developing neighborhoods, which will strengthen the city's tourist appeal.
• Carshare programs: Supporting a new generation of sustainable transportation such as electric scooters and bicycles.

Thus, Madrid offers a more developed public transportation system in keeping with its size and status as a capital city, while Valencia attracts with its accessibility and fewer traffic jams. The choice of city depends on transportation preferences and lifestyle.

Legal and tax specifics: Madrid vs Valencia

Purchasing real estate in Spain requires a thorough understanding of the legal and tax aspects. Let's take a look at what you should consider when investing in Madrid and Valencia.

Real estate taxes

Madrid:

• Real estate tax (IBI): The average is 0.4-1.1% of the cadastral value. It depends on the type of property and location.
• Capital gains tax: A tax is levied on the sale of real estate, which can be as high as 19%-23% depending on the increase in value.

Valencia:

• IBI: Slightly lower than in Madrid, between 0.4-0.9%. This makes owning real estate a little cheaper.
• Other fees: Include stamp duty and property transfer tax, which is typically 10% of the transaction value.

Legal aspects of purchase for foreigners

Madrid:

• Registration and documents: Foreigners must receive NIE - the alien's identification number. This process can take several weeks, so it is important to start early.
• Legal support: It is recommended to engage a lawyer to verify all documents and ensure the transparency of the transaction.

Valencia:

• Nuances of the transaction: The process is similar to Madrid, but in Valencia it is possible to get recommendations from local agencies that provide support for newcomers to the market.
• Investments in reconstruction: For those looking to invest in upgrades, consider possible building permits and interior changes.

Comparison of legislation

Madrid:

• Strict regulations: More bureaucracy, but it guarantees a higher level of transaction security.
• Supporting innovation: Actively supporting investment in sustainable and energy efficient real estate.

Valencia:

• Flexibility in transactions: With fewer competitors and easier processes, deals go faster.
• Support for environmental projects: The city is actively developing green spaces and innovative projects, which strengthens its investment attractiveness.

What should an investor choose: Madrid vs Valencia?

Choosing a city to invest in depends on your goals, budget and preferences. Both cities offer unique opportunities and this makes them attractive to different types of investors.

Recommendations for different types of investors

Madrid:

• Corporate investments: Suitable for corporate investors and professionals looking for assets in a vibrant capital city with rich economic potential.
• Luxury real estate: Investing in prestigious neighborhoods such as Salamanca can provide high returns. Prices here start from 700,000 euros for the apartment.

Valencia:

• Beach real estate: Ideal for investors interested in resort real estate. Average prices for coastal apartments are 200,000-400,000 euros.
• Long-term investments: Great for those who want to take advantage of the growing tourist traffic and improved infrastructure.

Pros and cons of each option

Madrid:

• Positive: High level of liquidity, developed infrastructure, significant rental market.
• Minuses: Higher cost of living and competition among investors.

Valencia:

• Positive: Affordable prices, growing tourism sector, lower property taxes.
• Minuses: Less developed infrastructure compared to Madrid, possible seasonal dependence of demand.

Final comparison

Madrid offers stability and high potential for quick returns, making it attractive to experienced investors looking for certainty in their investments.

Valencia The country's affordability and opportunities for investment in tourism-oriented projects make it an ideal place for investors who want to start with smaller sums and expect long-term returns.

So, the choice depends on your investment goals: Madrid ideal for those looking for quick returns and stable investments while Valencia opens up opportunities for quieter but promising investments.