Numbers Don’t Lie


The specter of a Marcos Jr. presidency is real. Some may be looking forward to it, others are anticipating it with trepidation. My regular readers know that I view a Marcos presidency with dread. My sentiments would not be so negative if Marcos Jr. had been clear about his intentions from the beginning. Even at this late stage in the campaign, he has not communicated his economic agenda, his position on the West Philippine Sea, nor his position on national emergencies like the state of education and poverty. The call for unity is not a plan. The absence of a leadership agenda does not inspire confidence.

As a father and businessman, I must prepare for the worst. Poorly considered policies can very well cause the country to spiral into an economic rut and leave all but the Marcoses in dire straits. We’ve seen this happen before.

With so much uncertainty, my wife and I decided to do the responsible thing and diversify our portfolio of investments overseas. It is our way of hedging risks. After studying many options, we have decided to invest in property in Madrid. With the help of our consultant, Luis Perez of L&L Consultants (e-mail:, we put together a study that validates Madrid as the best investment option over other European cities. The residency status that comes with an investment is a bonus and an escape just in case martial law or any such national disasters are forced upon us. Luis Perez handled our queries competently and guided us through every step of the investment process. It was an easy and painless experience. Let me share the results of our study.

Madrid is only world city that is a financial center, a cultural center, an educational center, and a political center whose property prices are among the most affordable in Europe. For context, Paris is the most expensive city where the average price of a one-bedroom apartment of 50 square meters is €620,000. London follows with a cost of €581,000. The same can be bought in Madrid for only €246,000.

Of course one can opt for cities with lower residential costs. The equivalent flat in Lisbon, for instance, carries an average price of €228,000 while one in Brussels is going for €221,000. However, these cities cannot compare to Madrid’s global gravitas, prestige, and resale value.

The Spanish capital has surpassed its sister city, Barcelona, as the foremost destination for investments, corporate headquarters, and tourism. Political unrest, due to Barcelona’s desire to secede from the Spanish Kingdom, have caused many Catalan businesses to relocate elsewhere — particularly to Madrid, Valencia, and Malaga. Even Barcelona-based banks such as Caixia and Banco Sabadell have moved part or all their headquarter operations to alternative cities. Madrid is host to 90% of all corporate headquarters in Spain while Barcelona is host to only 5.4%.

In terms of tourism, Barcelona attracted 12 million tourists in 2019 while Madrid attracted 10.4 million. Interestingly, however, Madrid registered more investments in new hotels in 2019 to 2021 than Barcelona has. With Madrid positioning itself as a center for art, culture, and gastronomy, analysts foresee the Spanish capital capturing the lion’s share of foreign tourism.

Property prices in Madrid have vacillated since their peak just before the financial crisis of 2008. Back then, the average price of a Madrid home was €4,000 per square meter. Prices bottomed in 2013 at €2,000 per square meter triggered by high national debts and bad loans. The Spanish government has since tightened the screws on cheap mortgages to prevent the artificial inflation of property prices. As a result, prices steadily recovered from 2014 to 2019. Just before the pandemic stuck in March 2020, the cost of residences was at €3,100 per square meter.

The effect of the pandemic on housing prices in Madrid was minimal at only 5%. Recovery was better-than-expected in 2021 as prices rebounded by double-digits across all Madrid barrios.

The prognosis for 2022 is a 6.1% increase in square meter value, on average. However, three months into the year and Madrid is already surpassing expectations. Data from Spain’s property portal, Idealista, shows a strong demand in Madrid homes where 23% of all listings are sold within seven days.

In the next five years, property prices are seen to increase more rapidly as demand spikes due to the influx of high quality immigrants, students and expatriates.

Madrid is divided into barrios, each with varying characteristics and investment outlooks. Here are the profiles of the more popular neighborhoods:

Centro: Centro is the historical and cultural heart of Madrid and of Spain itself. It is home to the stately shopping street, Gran Vía, the iconic square, Plaza Mayor, and the lavish Royal Palace. Masterpieces hang at the Prado Museum, while nearby Retiro Park has paths in former royal gardens. There is buzzing nightlife in Chueca, known as the LGBT quarter, plus vintage tapas bars in Barrio La Latina. Barrio de las Letras is where Jose Rizal used to live. Malasaña is the artsy, bohemian corridor of the city. The average price of residences here is €4,987 per square meter today. Growth last year was 3.2%.

Salamanca and Retiro: Barrio Salamanca and Retiro are technically inside Centro but are distinguished for their posh character. This is where the rich and elegant reside. The grand 19th century boulevards of glamorous Salamanca are lined with fine-dining restaurants, designer boutiques, and art galleries. Embassies of various nations are within the vicinity. The average price of residences here is €6,200 per square meter today. Growth last year was 6.6%.

Chamberi: Barrio Chamberí is a stately residential neighborhood with many cultural attractions including the Sorolla Museum and the Transport Museum. It is also home to avant garde theaters located in Teatros del Canal where edgy plays are staged. Locals of all ages gather for tapas in Plaza de Olavide and young Madrileños head to upscale nightclubs in Almagro. Chamberi is well loved by young families for its wide, tree-lined sidewalks and central location. This barrio was once an apple orchard. The average price of residences here is €5,454 per square meter today. Growth last year was 3.9%.

Chamartin: Chamartín is a residential area near the central business district. It boasts of upscale shops and bistros on Principe de Vergara St. The broad avenues are lined with lush gardens, towering office buildings, and Santiago Calatrava’s Caja Madrid Obelisk. Soccer fans head to Santiago Bernabéu Stadium to watch Real Madrid. The average price of residences here is €5,219 per square meter today. Growth last year was 3.2%.

Recommended suburbs of Madrid are the pueblos of Aravaca, Puerta de Hierro, Majadahonda, Pozuelo, La Finca, and La Moraleja. These places are Madrid’s version of Alabang or Nuvali, if you will. Prices differ according to the suburb but they could range from €4,500 to €6,500 per square meter. Growth last year was 3.9%.

Whether for risk mitigation or for investment, our comparative study shows that Madrid is the city to invest in this year.


Andrew J. Masigan is an economist

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