The ECB holds rates and Madrid's prime market cools its climb

The final week of July leaves a clear map for anyone buying, selling or investing in prime residential property: the European Central Bank holds rates steady, Madrid's luxury market keeps rising but at a slower pace, and the international buyer is gaining structural weight.

The ECB holds rates, with September in play

At its meeting on 23 July, the ECB's Governing Council left the three key interest rates unchanged — the deposit facility at 2.25% — just six weeks after its first hike since 2023. The bank did not rule out a further move upward at its 10 September meeting, to which markets assign a high probability. Meanwhile, twelve-month Euribor closed July with a provisional average around 2.8%, at the month's highs and above June's figure (sources: ECB, idealista, Rankia). For buyers relying on financing, the message is one of near-term stability with an upward bias: it is worth locking in mortgage terms without delay.

Madrid's luxury market keeps rising, but eases its pace

The fourth DIZA Market Report, covering the second quarter, describes a prime market entering a more selective phase: prices rose 3.2%, down from 4.7% at the start of the year, while transactions on a trailing twelve-month basis fell 7.3% (sources: DIZA Consultores, idealista, elEconomista). This is not a reversal but a maturing: lower volume, prices still climbing, and affordability at its lowest — one million euros is no longer enough to buy in nine of the city's twenty prime zones. For sellers of quality product it remains a favourable moment; for buyers, selection and access matter more than ever.

The international buyer, now one in four

Foreign demand accounts for close to 24% of transactions in the capital and exceeds 30% in areas such as Recoletos and La Moraleja (sources: idealista, Engel & Völkers via Moncloa). It is patrimonial demand, less sensitive to the domestic economic cycle and to price, coming above all from the United States, Latin America and northern Europe. For owners, it widens the universe of solvent buyers; for international buyers, it confirms that Madrid's finest addresses trade in an increasingly competitive — and often discreet — circuit.

On the regulatory front, no change

The announced levy of up to 100% on property purchases by non-EU non-residents remains a proposal: it has not been debated or voted on in parliament and was left out of the government's January housing package. As of today it is not in force. We follow it closely and will keep our clients informed of any real change.