Madrid metropolitan house prices climbed sharply last December, with a 19.6% year-on-year rise regionwide and Torrejón de Ardoz up 22.6%. Affordability is stretched — Madrid city households now face a 56% purchase effort.
Last December confirmed what many Madrid residents have felt for months: the region’s housing market is overheating. A new appraisal from Tinsa shows residential prices in the Community of Madrid rose 19.6% year-on-year — equivalent to a real increase of 16.3% after removing inflation — and that growth is widespread across the metropolitan area, not just in the capital.
Madrid city saw one of the sharpest accelerations, with prices up 20.9% year-on-year. The average price across the province now stands at €3,799 per square metre, but this number masks stark contrasts between neighbourhoods and municipalities.
Where prices are highest (and lowest)
• Madrid city leads the region at €4,883/m². High-end suburbs in the west remain expensive too: Pozuelo de Alarcón (€4,492/m²), Majadahonda (€4,126/m²) and Las Rozas (€3,744/m²).
• Northern municipalities such as Alcobendas and San Sebastián de los Reyes generally trade between €3,400 and €4,300/m².
• The east and south are more affordable on paper, with unit values between €2,000 and €3,100/m²; Parla registers the lowest average at €2,023/m².The outlier: Torrejón de Ardoz
Torrejón de Ardoz stands out as the municipality with the largest year-on-year increase across the entire region, climbing 22.6% — even beating Madrid city’s own rise. The jump highlights that price pressure is spreading beyond traditional hotspots.
Affordability under strain
The Tinsa report also highlights a worrying squeeze on household finances. The theoretical purchase effort — the share of average disposable income families would need to buy a home — is 43% across the province, well above the 35% threshold considered reasonable. The situation is acute in the capital, where the effort reaches 56%.
Several municipalities outside the city also exceed reasonable effort levels: Alcorcón (38%), Leganés (37%), Móstoles (36%) and Coslada (36%). In contrast, Alcobendas (34.9%) and San Sebastián de los Reyes (33.4%) keep purchase effort closer to balanced levels.
Why north vs south differs
The price divergence between Madrid’s north/west and its south/east reflects longer-term socioeconomic divides:
• Income differences: Wealthier municipalities such as Pozuelo top national per-capita income lists, enabling higher prices.
• Jobs and services: The north and center attract large companies and highly qualified workers, driving demand and prices.
• Buyer profiles: Lower-priced suburbs still draw young professionals and families who accept longer commutes in exchange for affordability, keeping demand alive even where incomes are lower.What this means
The Madrid market shows spatial segregation: higher incomes concentrate in the north and west, where housing is pricier but often within residents’ means; in the south and east, lower nominal prices do not necessarily translate into affordability because incomes lag behind. For policymakers and prospective buyers, the new data underscores the urgency of measures to expand supply, support affordable housing and ease the growing purchase burden on households.
