Madrid rents eat 37% of income as nomad competition tightens

Madrid's rental market stays tight

Madrid remains Spain’s hardest rental market for expats and digital nomads, with average 1-bedroom apartments at about €1,150 ($1,248) a month and 2-bedroom units near €1,700 ($1,844). Central districts are running in the mid-20s euros per square meter, while Salamanca has reached €28/m² ($30.34/m²).

Rents in the city ate up about 37% of average household income by December 2025 and market trackers expect another mid-single digit rise this year. Spain’s national rental stock is projected to fall below 670,000 registered units in 2026.

Foreign tenants face the sharpest competition

Foreign professionals are getting hit hard because some landlords price them higher and ask for stronger proof of income, savings or employment history. About 15% of rental homes in Spain are rented within 24 hours and some high-demand listings draw dozens of inquiries the same day they go online.

Tourists and short-term visitors are feeling the squeeze too. More landlords are shifting units into seasonal and tourist rentals, which cuts long-term supply even further.

What renters need to have ready

Madrid isn't an official stressed zone, so the city’s rent rules are still different from places like Barcelona and parts of the Balearic Islands. Still, the national RDL 8/2026 rent cap limits annual increases to 2% and gives tenants 2-year contract extensions.

Renters should expect to show employment contracts, income proof and sometimes significant savings before applying. For more on changing housing rules and other visa updates, read our full Spain guide for the complete picture.