Madrid, Spain's vibrant capital, has become Europe's place to be.
The city is attracting more and more expatriates and investors, seduced by its quality of life, cutting-edge cultural offerings and economic appeal.
With an average price of €5,723/m² (+21.3% since summer 2024) and falling yields, it's more important than ever to be well prepared for a successful project. With this in mind, the experts at Terreta Spain have prepared this comprehensive guide to the neighborhoods of Spain's belle belle.
Use our interactive map to view and compare the location of each neighborhood. MADRID NEIGHBORHOODS
The central neighborhoods: culture and urban life
Centro
The Centro district is the beating heart of Madrid: a concentrate of emblematic monuments, effervescent shopping and intense nightlife. Its Gran Vía, the backbone of the city, is reminiscent of the Champs-Élysées in a Madrid version. As for Chueca, the capital's trendiest district, it's located in this district and deserves a spotlight, to be discovered below.
Things to see and do
- Puerta del Sol and its statue of the bear and the strawberry tree;
- Plaza Mayor ;
- El Mercado de San Miguel;
- Stroll the shopping streets of Gran Vía ;
- Malasaña's vintage bars and boutiques;
- Plaza del Dos de Mayo ;
- The Huertas district, nicknamed the barrio de las Letras because Cervantes and Lope de Vega lived there.
- The Royal Palace.
- Push open the doors of the Teatro Bellas Artes, one of the sets of Almodóvar's film All About My Mother (1999).
The Centro real estate market
PURCHASE: €7,251/m² (+13.3%) RENTAL: €26.5/m² (+10.5%)Purchase price
Estimate of profitability
Here, profitability doesn't exceed 4.3% gross. That's not bad, but the area isn't the Eldorado of rentas. Centro is prestige. Period.
Target profiles
Centro is designed for investors looking above all for a premium, heritage location: affluent expatriates, executives and families attracted by centrality, cultural life and long-term value.
Services
There's no doubt about it: Centro boasts the capital's most comprehensive offering. Local shops, restaurants, schools, theaters, museums, hospitals, a comprehensive transport network and much more. In this area, everything is accessible on foot or in just a few minutes by public transport. Living comfort is at its best.
| Terreta Spain tip: Investing in Centro means betting on the symbol and iconic views rather than on profitability. To generate income, premium Airbnb remains the most effective strategy, buoyed by the area's enormous tourist appeal. |
At Terreta Spain, we support investors from A to Z: choice of neighborhood, property selection, renovation and rental management.
Contact us for a profitable turnkey investment in the heart of Madrid or elsewhere.
La Latina
The Latina district, also located in the capital's historic center, is known for its winding medieval streets, authentic tapas bars and local ambience. It's also home to the famous Rastro flea market, which welcomes thousands of tourists and strollers every Sunday. La Latina is the traditional, popular Madrid we've come to expect.
Things to see and do
- Medieval alleyways ;
- Authentic tapas bars ;
- El Rastro flea market;
- The Plaza de la Cebada and the famous "El Viajero" bar, the filming location for the hit Spanish series Valéria, broadcast on Netflix.
La Latina real estate market
PURCHASE: €3,683/m² (+25.8%) RENTAL: €18.4/m² (+10.5%)
Estimate of profitability
With profitability approaching 6%, Latina is ideal for combining returns and long-term value enhancement.
Target profiles
Perfect for investors looking for a good compromise between accessibility and yield in a central area. It particularly attracts young professionals and expatriates attracted by its festive, bohemian atmosphere. The district is also perfect for those who bet on Airbnb-type rentals.
Services
In terms of services, La Latina boasts local shops, schools, good public transport links and access to the historic center. The area is lively and well served. Nothing else to say.
| Terreta Spain Tip: La Latina remains a safe bet in the center of Madrid. A renovated one-bedroom apartment can easily be rented on a short-term basis - don't worry, Terreta Spain can take care of your renovation. Surfaces of less than 70 m² are most in demand on Airbnb: it's a good idea to boost already good returns. |
Uptown: luxury and elegance in the heart of the capital
Salamanca
The Salamanca district is one of the most upscale and elegant in the city. Structured in the 19th century around large avenues, it is full of prestigious schools, and its streets are lined with boutiques of major designers, Michelin-starred restaurants, and buildings with classical architecture.
Things to see and do
- Luxury boutiques on the "Milla de Oro": Louis Vuitton, Loewe, etc.
- The Lazaro Galdiano Museum and works by Goya ;
- La Casa Árabe.
Salamanca real estate market
PURCHASE: €9,706/m² (+17%) RENTAL: rental €27.6/m² (+10.3%)
Estimate of profitability
3.4% gross yield is not much. But these low returns are more than compensated for by unparalleled asset enhancement.
Target profiles
Unsurprisingly, Salamanca is reserved for high-end investors, more interested in asset security than immediate yield. The district therefore attracts a discerning international clientele, made up of families, diplomats, senior executives and investors looking for a "blue chip" property in Madrid.
Services
Salamanca boasts one of the most exclusive service offerings in Madrid. Luxury boutiques, Michelin-starred restaurants, sublime hotels, international private schools, private clinics and more. And excellent metro and bus links. Salamanca is the choice for an unrivalled quality of life.
| Terreta Spain tip: If you're looking for immediate profitability, Salamanca is not the right district. If you're looking for immediate profitability, Salamanca isn't the right area to buy. You should buy to enhance the value of your assets over the long term, in much the same way as you would buy around Avenue Montaigne in Paris, Passeig de Gracia in Barcelona or Mayfair in London. |
Chamberí
Chamberí is one of Madrid's most exclusive and sought-after neighborhoods. Nicknamed "Little Paris", it is appreciated by local residents for its traditional atmosphere and elegant architecture. Highly attractive to affluent families looking for a central yet peaceful living environment, it is predominantly residential.
The district is distinguished by its tree-lined streets and opulent Haussmann-style buildings. The air in Chamberí exudes a unique blend of tradition and modernity.
Things to see and do
- Haussmann architecture;
- Plaza de Olavide and its restaurants;
- Visit the Sorolla Museum, housed in the painter's house;
- Stroll its tree-lined streets;
Chamberí real estate market
PURCHASE: €8,317/m² (+19.2%) RENTAL: €25.5/m² (+8.5%)
Estimate of profitability
In the Chamberí district, returns are similar to those in Salamanca, albeit slightly higher: 3.6% on average. Here too, it's the potential for long-term appreciation that makes the difference and attracts buyers.
Target profiles
Chamberí is ideal for investors looking for an upscale residential neighborhood, halfway between the prestige of Salamanca and the authenticity of less glamorous areas. The neighborhood attracts a family-oriented clientele, young executives and expats who want to combine proximity to the center, a quiet atmosphere and a good quality of life without necessarily aiming for luxury.
Services
Excellent metro and bus links, proximity to the center, numerous private and public schools, local shops and a rich cultural offering. You'll find it all in Chamberí.
| Terreta Spain advice: Choosing Chamberí means choosing stability and security for your assets. A good investment if you have the means. |
The bohemian and alternative neighborhoods
Lavapiés, centro
Lavapiés is located in the Centro district, but we've chosen to focus on it for its incomparable atmosphere. In fact, it's one of the Spanish capital's most dynamic and multicultural districts.
Renowned for its cosmopolitan atmosphere and thriving art scene, Lavapiés is an open-air museum and a must for contemporary art lovers. Here you'll find a multitude of galleries and cultural centers, as well as colorful street artworks with committed messages.
Things to see and do :
- Street art and graffiti
- The Reina Sofia Museum and Guernica, Picasso's impressive masterpiece;
- Contemporary galleries on Calle del Doctor Fourquet, nicknamed "the street of art";
- La Casa Encendida, a superb cultural center with a rooftop terrace that's always packed when the weather's mild;
- La Tabacalera, a former tobacco factory transformed into an art space.
The Lavapiés real estate market
PURCHASE: €6,111/m² (+22.2%) RENTAL: €25.7/m² (+11.7%)
Estimate of profitability
5% profitability in such close proximity to the hyper-center is very attractive.
Target profiles
Lavapiés is made for buyers looking for a good rental yield and who dare to bet on a neighborhood in full transformation, lively, fresh, young and creative. Investors can opt to rent furnished, shared or short-term.
Services
No problem there. Bars, restaurants, small shops, transport, proximity to Atocha station, Lavapiés is well endowed.
Note that there are fewer schools than in the upscale neighborhoods.
| Terreta Spain Tip: Lavapiés is an ideal choice for investors looking for a balance between good yields (5%) and long-term value enhancement. Indeed, the district is one of the last pockets in the center where yields remain attractive for a capital city of this size. |
Chueca, centro
Look no further than Chueca, Madrid's trendiest neighborhood. Located just off the Gran Vía, it has over the years become the center of the capital's LGBTQ+ community. Chueca's lively nightlife attracts locals and tourists alike. As soon as night falls, the district takes on a whole new look.
Chueca is also known for its trendy fashion and design boutiques and first-rate cultural centers. Its picturesque streets are living testimony to its rich past.
Things to see and do :
- LGBTQ+ bars and clubs, including Le Delirio, the area's most iconic nightclub;
- Trendy boutiques ;
- Plaza de Chueca;
- El Mercado de San Antón and the Manuela kiosk (special mention for its sesame chicken brochettes);
- The Museum of Romanticism;
- To attend "Orgullo", the Gay Pride that sets Madrid ablaze every year, is to plunge into the heart of the Chueca experience. We hope you do!
The Chueca real estate market
PURCHASE: €8,725/m² (+11.3%) RENTAL: rental €28/m² (+5%)
Estimate of profitability
In this area, yields hover around 3.8%, which isn't bad for such a sought-after neighborhood, but it's not huge, let's be clear.
Target profiles
Chueca is a central, lively and trendy neighborhood that attracts young, international investors. The clientele is LGBTQ+ friendly and urban. Chueca is also a hot spot for expatriates and professionals who prefer city life and a lively atmosphere.
Services
In terms of services, Chueca combines a hypercentral location, excellent metro/bus links, a great cultural offering, numerous shops, restaurants, cafés, bars and clubs galore. Everyday services such as healthcare, schools and convenience stores are within easy reach.
| Terreta Spain tip: Buying in Chueca means buying on impulse . It means being seduced by its lifestyle and incomparable atmosphere. It also means betting on long-term value, but not on returns (3.7%). |
Living in Madrid close to nature
Retiro
The Retiro district borders the famous Buen Retiro park, in the heart of the capital. Its privileged location combines green spaces with urban amenities.
The atmosphere is peaceful, the setting pleasant, away from the tourist bustle of the hyper-center. The architecture is refined and gives an undeniable charm to this district.
Things to see and do
- Rent a boat on the Estanque - a Sunday ritual for Madrid families;
- Admire the Crystal Palace and its impressive iron structure;
- Visit the Cuesta de Moyano and its bookshops;
- Visit the nearby Prado Museum.
The Retiro real estate market
PURCHASE: €7,822/m² (+29.9%) RENTAL: Rental €23.7/m² (+10.5%)
Estimate of profitability
Retiro offers a gross return of around 3.6%.
Target profiles
Perfect for buyers looking for a quiet, green, residential neighborhood, or for investors opting for a long-term premium rental project or for value enhancement.
Services
Immediate access to Retiro Park, Madrid's green lung. Numerous schools, local shops, residential and family atmosphere. Good transport links.
| Terreta Spain Tip: Retiro is a safe haven: demand remains strong and prices are rising steadily. A safe investment, particularly suited to families and expatriates seeking stability and a premium living environment. |
An investment project in Madrid? Contact our experts for full support.
The modern districts
Chamartín
Chamartín is a modern district in the north of Madrid. It is known for its exceptional connectivity (proximity to the train station and road access). It is home to emblematic skyscrapers, such as the famous Torres Kio, the world's first inclined towers, nicknamed "la Puerta de Europa", "the Gateway to Europe".
Chamartín is also a constantly evolving business district that attracts investors. Ambitious projects are multiplying, such as the colossal Madrid Nuevo Norte, which aims to transform the north of the capital into an ultra-modern, sustainable economic and residential hub. Things to see and do
- Admire the Cuatro Torres, the Spanish capital's business district;
- Visit the newly renovated Bernabéu;
- Stroll through Berlin's park, which features stones from the "Wall of Shame".
Chamartín real estate market
PURCHASE: €7,586/m² (+18%) RENTAL: rental €22.9/m² (+11.1%)
Estimate of profitability
Chamartín offers the same gross profitability as Retiro: 3.6%.
Target profiles
The area is ideal for investors who prefer an upscale residential neighborhood with a stable clientele: families, affluent expatriates, senior executives and international professionals attracted by the proximity of the business district.
Services
Excellent public transport links, close to Madrid's CBD (Castellana, Azca, Cuatro Torres), its financial heart, schools, clinics, large shops, restaurants and green spaces. Not bad at all.
| Terreta Spain Tip: The current yield remains modest (3.6%), but Chamartín is a bet on the future. With the Madrid Nuevo Norte project scheduled for completion by 2030, the potential for added value is considerable. |
Tetuán
Tetuán is a district undergoing profound transformation. It is located to the north of the city and adjoins Chamartín. The area is very well connected and brimming with real estate opportunities. It is attracting an increasing number of investors, spurred on by various initiatives aimed at revitalizing the district(AXA IM, for example, has just completed the construction of two 24-storey towers).
Things to see and do
- Explore the Mercado de Maravillas;
- Go up Calle Bravo Murillo ;
- Admire the local frescoes.
The Tetuán real estate market
PURCHASE: €5,643/m² (+20.8%) RENTAL: €22.2/m² (+10.1%)
Estimate of profitability
Tetuán offers gross yields of around 4.7%. It's one of Madrid's most profitable neighborhoods, while remaining more affordable to buy.
Target profiles
Tetuán is an attractive choice for buyers seeking a good compromise between entry price and profitability. The neighborhood is undergoing a period of change, making it a good choice for medium- and long-term rental projects and for long-term value-add strategies.
Services
You'll find it all here: shops, transport, sports facilities, green spaces. And for us, the best part is the popular, cosmopolitan and evolving neighborhood life.
| Terreta Spain tip: With a yield of around 4.7%, Tetuán offers a good compromise. Small surface areas and shared accommodation are particularly profitable: a strategy to be favored to maximize your rental income. |
Moncloa
Moncloa-Aravaca is a lively, modern area in the west of the city, popular with students due to its proximity to two of Madrid's major universities (Complutense and Polytechnic). It's ideal for property investors interested in student rentals. Small apartments are highly sought-after in the district and rent very well.
Moncloa is well connected and benefits from its proximity to Casa de Campo, one of Madrid's green lungs.
Things to see and do
- Climb to the Faro de Moncloa (panoramic tour) ;
- La Casa de campo, ideal for a jog or a snack on the lawn.
Moncloa real estate market
PURCHASE: €6,074/m² (+20.8%) RENTAL: €21.3/m² (+8.2%)
Estimate of profitability
4.2% average returns for Moncloa and sustained demand fuelled by local students.
Target profiles
Moncloa is Madrid's university district, ideal for investors banking on strong student demand, shared accommodation and furnished rentals.
Services
The strong point is clearly its proximity to Ciudad Universitaria. But Moncloa is also very well served by transport, with many local shops, bars and student-friendly services.
| Terreta Spain Tip: In Moncloa, yields are around 4%. Studios and shared flats are easily snapped up by students, making it a safe bet for rental investment. |
The most profitable districts on Madrid's outskirts
Puente de Vallecas (7.5%)
Puente de Vallecas is a district in the southeast of Madrid, sometimes considered harsh but deeply authentic, a true reflection of Madrid's popular life. Its streets and inhabitants were featured in the Netflix series Entrevías, which popularized the area.
Things to see and do
- The Cerro del Tío Pío park, nicknamed "las siete tetas", offers one of the best panoramic views of Madrid, superb at sunset;
- Entrevías, the neighborhood in which the famous Spanish Netflix series of the same name is set.
The Puente de Vallecas property market
PURCHASE: €2,971/m² (+21.8%) RENTAL: €18.7/m² (+15.7%)
Estimate of profitability
7,5 %. Who can beat that?
Target profiles
Yield-oriented investors, attracted by Madrid's low entry ticket. Strong potential for affordable long-term rentals.
Services
Please note that in this outlying neighborhood, the range of services is more limited. There's good access to public transport, but fewer quality infrastructures.
| Terreta Spain Council: Puente de Vallecas is the cash-flow champion. A small apartment of less than 70 m², well located near the metro, guarantees a good return and easy resale. But the district is still in transition: the "Entrevías" image persists, and some streets still struggle to appeal. Here, more than anywhere else, location makes all the difference - hence the importance of being guided by local market experts. |
If you're looking for a profitable, turnkey investment in Madrid, contact our experts for personalized assistance.
Known as Madrid's "Chinatown", this lively, popular and cosmopolitan district is home to temples and Asian supermarkets.
Usera (7.2%)
Things to see and do
- Participate in Chinese New Year parades;
- Stroll along the Madrid Río.
The Usera real estate market
PURCHASE: €3,177/m² (+21.8%) RENTAL: €19.1/m² (+8.9%).
Estimate of profitability
7.2%, another very good yield for a neighborhood well connected to the center.
Target profiles
Logically, as in the case of Puente de Vallecas, projects here are reserved for investors in search of profitability capable of betting on a district in the throes of transformation.
Services
Numerous Asian shops, restaurants, markets, metro connection to the center.
| Terreta Spain tip: Profitability is attractive and rental demand strong, but tenant turnover and the risk of non-payment remain higher than in consolidated neighborhoods. To secure your investment, concentrate on areas close to Madrid Río. |
Carabanchel (6.3%)
Carabanchel, once a working-class district, is now a thriving, arty neighborhood. With the Matadero as a major cultural hub, it attracts a trendy, creative clientele in search of authenticity.
Things to see and do
- Visit the Matadero Madrid ;
- Explore the giant frescoes ;
- Walk along the banks of the Manzanares, the river that runs through Madrid.
The Carabanchel real estate market
PURCHASE: €3,388/m² (+21.7%) RENTAL: €17.8/m² (+11.2%)
Estimate of profitability
6.3% average profitability for Carabanchel. Solid, attractive yields at reasonable purchase prices.
Target profiles
For those looking for stability and volume, backed by steady rental demand.
Services
Good metro and bus links, local shops, hospitals, health centers, green spaces, public schools. In short, a well-established working-class neighborhood.
| Terreta Spain tip: Carabanchel offers a good balance between yield and value. Renovated 2-3-room apartments are the most sought-after. But beware: some parts of the district are still very working-class and not very attractive. |
To find out more about how to buy in Spain, take a look at our complete retro-planning, which will help you to see each stage of the process more clearly. And if you want to fine-tune your budget, head for our purchase simulator.
FAQ : The ultimate guide to Madrid's neighborhoods
What is the average price of real estate in Madrid in 2025?
The average price is €5,723/m², up +21.3% since summer 2024.
Which are Madrid's most central districts?
Centro (Sol, Gran Vía, Malasaña, Huertas, Chueca) and La Latina. These are the most emblematic areas for history, shopping and nightlife.
Which is the most expensive neighborhood in Madrid?
The Salamanca district, nicknamed the "Milla de Oro", where prices exceed €9,800/m².
Where to live in Madrid as an expatriate?
Families prefer Retiro or Chamberí for their residential setting and proximity to schools and green spaces.
Which neighborhoods offer the best rental yields?
The best yields are found in Puente de Vallecas (7.3%), Usera (7%) and Carabanchel (6%).
Which neighborhoods are best for students?
Moncloa-Aravaca is the #1 choice, thanks to its proximity to Complutense University and the Polytechnic. Studios and shared apartments are easy to rent.
Which neighborhoods are the trendiest and most alternative?
Chueca, a hot spot for the LGBTQ+ community and Madrid's nightlife scene, and Lavapiés, a multicultural and artistic district.
Where can you enjoy nature in the city?
The Retiro district, centered around the UNESCO-listed Buen Retiro park.
Which neighborhoods are undergoing transformation and offer potential for development?
Chamartín (with the Madrid Nuevo Norte 2030 project) and Tetuán, which is undergoing a major real estate transformation.
Which are the most prestigious neighborhoods in which to invest?
Salamanca and Chamberí are safe havens: people buy more to secure their assets than for yield.
Sources: Esmadrid, Wikipedia, Idealista, Trip advisor, Google maps
