In the real estate market in the northern area of Madrid for luxury homes, a slight slowdown in demand is expected, but only slight. If the economy remains stable and we do not enter a recession, it is likely that buyer interest in properties in luxury areas such as La Moraleja, El Encinar de los Reyes and Ciudalcampo will continue.
In recent years, the real estate market has experienced a strong rise. In general, demand for homes has been high, with local and international buyers interested in acquiring properties in this area.
The impact of government policies and regulations on the real estate market must be taken into account. In Spain, several measures have been implemented to control housing prices and protect tenants, but in the luxury housing market in Madrid this regularization, far from keeping rental prices low, has led to a shortage in the supply of rental properties, and a sharp rise in rental prices.
This is because many owners of rented properties have refused to raise only 2% to the tenant and have caused the tenant to abandon the property, making it easier for the owner to raise the rental price considerably at the end of the contract.
The demand for luxury properties in the northern part of Madrid is likely to remain high for the foreseeable future if favorable economic and political conditions for buyers, such as economic and political stability in Spain and surrounding countries in Europe, continue.
Although the steady rise in interest rates is making mortgage lending more expensive, it does not seem to be having a significant impact on luxury home buying intentions in Madrid, we assume primarily because housing is seen as a safe haven in the face of so much financial uncertainty.
Although home prices in residential areas such as La Moraleja, El Encinar de los Reyes, and Ciudalcampo have been high in previous years, they are expected to remain stable in the near future, as this area is one of the most exclusive and sought-after areas of the Spanish capital and supply is lower than demand.
The demand for housing in the northern area of Madrid has historically been high due to the large number of companies and businesses located in the area, which attracts a population with high purchasing power and, therefore, an exclusive real estate market with high prices.
In terms of demographic trends, it is expected that the population both from Madrid and from outside Spain will continue to grow in the coming years due to its attractive quality of life, luxury housing, easily accessible services, private schools and a wide range of leisure and dining options.
If we talk about the supply of new housing, we can say that it has been limited in recent years due to the limited availability of land for development. However, it is expected to increase slightly in 2023 due to the new constructions that have been developed in recent years and the renovation of existing ones, however, as construction prices have risen significantly, prices for these new construction and luxury homes are going to be significantly high.
In summary, the real estate market in the northern part of Madrid is expected to remain favorable for home buyers and sellers in 2023. Home prices are expected to continue to increase, albeit at a slower pace than in previous years, due to strong demand and limited supply.