Accommodation in Madrid
In spite of the current economic crisis in Spain, finding quality and well-priced accommodation in Madrid is still relatively 
difficult.
difficult. Madrid centre has continued to attract investors and expats alike, and prices have been decreasing more slowly than in other parts of the country. Furthermore, there is a lack of refurbished, spacious and well-located accommodation, which means the consequent high demand and low supply leads to increasing rental rates.
Still, accommodation is generally less expensive than in other Western European capital cities. However, compared to local Madrid salaries, monthly property costs can compromise over a third or half of your wage.
Types of accommodation in Madrid
The typical type of Madrid accommodation is a flat (apartment) with traditional small balconies. Usually, the more modern the flat, the smaller the living space; and demand and thus price tags for these newer entities remains high.
In general, older flats (+10 years of age) will be of lower quality than those of a similar age found in other capital cities in Western Europe.
The typical city centre flat sits within an old charming building, sometimes lacks light, has small bedrooms and if it is a rental, is furnished sparsely and cheaply. On the upside, city centre flats are in close proximity to nearly everything, and thus eliminate the need for expats to own a car.
Just outside of the centre, flats are cheaper, larger, modern, well-equipped, and usually include a garage. In the suburbs, houses become more common, and newly constructed flats can even include a swimming pool and tennis courts.
Madrid is a very safe city, thus home security is not an issue. Lastly, there are three IKEAs in Madrid, as well as many designer and quality furniture shops, which means that buying furniture upon arrival is as viable an option as shipping furniture from home.
Is it better to buy or rent in Madrid?
Most expats living in Madrid prefer to rent property. That said, retirees and large families planning to live in Spain for an extended period of time are more likely to buy property in Madrid.
At the moment, the property market in Spain is in the midst of a crisis, and property prices have dropped significantly. Still, expats planning to buy should be wary, while you may be able to bag a bargain now, you may not be able to sell the property for a reasonable price for a considerable chunk of time.
On the other hand, rental rates are stable and are forecasted to increase in future years; making renting a much safer option for the moment.
Renting accommodation in Madrid
The rental market in Madrid is under-developed compared to other capital cities in Western Europe, and for expats, this means that it becomes challenging to find a quality flat. Not to mention, the average furnished apartment in Madrid is of poorer quality than many westerners may be used too, and most landlords expect the tenants to manage and maintain the flat.
The good news is that the tenant selection process is not excessively demanding. Landlords choose their tenants on a "first come, first serve" basis; the only requirement being that you show proof of a stable salary, and that you can pay a security deposit amounting to the equivalent of one to six months’ of rent.
Flatsharing is developing itself in Madrid, and is slowly becoming the default option for students and young professionals who want to live in the centre, but who cannot afford to pay rent on their own.
How much does it cost to rent in Madrid?
- Expats can expect to pay roughly €15 per sq. metre in most city centre neighbourhoods.
- In cheaper neighbourhoods outside of the centre, rentals go for €12 to €14 per sq. metre
- In residential suburbs or in neighbourhoods at least 30 minutes from the centre, rentals can be found for € 10 to € 12 per sq. metre
Rental prices in the Madrid city centre
- 350 to 600 € for a quality room
- 700 to 900 € for a quality studio or 1 bedroom apartment
Negotiating your lease in Madrid
For standard leasing, the initial mandatory period is for one year, the security deposit required is the equivalent of one month of rent (two months if furnished) and payments are due on a monthly basis at the start of the month.
You will often be asked to give proof of a stable salary (job contract and last three pay slips), and in rare cases, references from your previous landlord. Providing this information to landlords can help to show how serious you about renting the property, and can help to differentiate you from other potential tenants.
The best neighbourhoods for expats
Expats tend to settle in the neighbourhoods that boast a large assortment of shops, bars and restaurants, such as the neighbourhoods of Malasaña, Chueca, Chamberi, Alonso Martinez and Salamanca.
►Madrid Interactive Neighbourhood Map
►Madrid Interactive Neighbourhood Map
Alternatively, affluent families often prefer to settle in trendy modern suburbs, such as Pozuelo, Aravaca or la Moraleja.
►Madrid Interactive Suburb Map
►Madrid Interactive Suburb Map
How to find accommodation in Madrid
There are three primary ways in which expats can find accommodation in Madrid.
►Online listings
Expats who already know the area in which they’d like to live, and who have already defined the criteria for their accommodation, can search for flats online. It is also possible to check data, organise viewings, negotiate rental prices with the landlord, review the contract and manage other administrative and legal requirements via this medium.
The best web sites are:
- idealista.com: an easy-to-use site with the best user interface and one of the best overall databases. Includes properties for sale, rent and flatshares.
- fotocasa.com: the biggest database for houses and flats to rent.
- enalquiler.com: a good alternative for looking for rentals.
- loquo.es: Spanish Craigslist, especially good for looking for bargains, flatshares and rentals.
You will also find niche sites when you look up "flat Madrid" on search engines. These sites usually offer short-term and long-term flats for rent at premium prices.
►Estate agents
If you neither have the time, the knowledge nor the language skills to search for accommodation in Madrid, real estate professionals will be your best resource.
Their level of English may not be the best, but they will look for flats within their portfolio that comply with your criteria. Standard fees for their services are the equivalent of one month’s rent for those letting, and the equivalent of 6 percent fee of the buying price for those purchasing.
Unlike the Costas, Madrid does not have several real estate agents who cater specifically to expats. Though, there are a few small companies who do so, and it is recommended expats seek out the services of one of these small companies, and utilise their help.
►Relocation agencies
What you will find in Madrid in larger quantities are relocation agencies that tackle all the issues you face as an expat moving overseas: utility set-up, visas, administrative requirements, best deals for Internet and phone, etc.
Most are focused on the needs of corporate assignees who have the financial backing of the company.
Though, even if you don’t have a corporate expense account behind you, it’s worthwhile to get a quote from one of these agencies.
Buying property in Madrid
The buyer property market in Madrid is currently full of both opportunities and risks. Prices have gone down 30 to 40 percent compared to the peak prices of the real estate bubble, and most industry professionals agree prices will decrease another 20 percent before recovery can begin.
This means you can find real bargains in Madrid. Though keep in mind that you may need to solicit financing from your home country, as banks in Spain do not grant credit for properties that are not their own.
If you plan to buy, be prepared to stay in the same property for at least seven years to make sure all risks of prices falling are covered.
The state has recently reduced the VAT for new properties from 8 percent to 4 percent, and the 2011 elections will surely bring new measures to help property buyers.
