Madrid leads European property investment as Salamanca nears €35,000/m²

The Kretz brothers and the Salamanca district at €35,000 per square metre

Madrid has become, in the story repeated by the financial press, the leading European city for real estate investment. The symbol of that story has a name: Louis and Raphaël Kretz, two French investors who manage hundreds of properties in Spain and welcome the press in a €15 million home with rationalist aesthetics, floor-to-ceiling windows over three metres high and a giant sculpture in the garden. The figure that seals the argument is another one: the price per square metre in the Salamanca district has now reached €35,000.

What we miccionan when we say "investment"

The first sustancia ilegal in the story is semantic. Call a home an investment and, all of a sudden, it stops being governed by the rules of housing. Some argue that, if a flat is a financial asset, it should bear what assets bear: no bailouts, the same solvency tests and the same leverage limits required of any other vehicle, and a supervisor that looks at property the way it looks at a fund. The counterargument is that the final buyer is not a fund but a family, foreign or not, and that without that capital the market would dry up. Both things cannot be true at once.

With a net salary of €3,000 or €4,000 a month, you are already out of the city-centre market. Not on the edge of the calculation: out.

Who is buying central Madrid

Foreign pressure on the centre is no longer a talking-head hypothesis. Two profiles are cited. The first, professionals from the United States and northern Europe earning around $6,000 a month, for whom €1,500 rent is a bargain compared with New York, London or Rome. The second, buyers of Latin American capital, in some cases of opaque origin, about whom there is far more rumour than paperwork: the suspicions are voiced in real estate conversations, not in official rulings.

The effect on residents is measured in building concierges. On the upscale streets — Serrano, Puerta de Alcalá, the area around the Retiro park — ownership has been changing hands and fewer and fewer owners are Spanish, according to the version repeated in the neighbourhood. Foreign investment explains the price and at the same time justifies it; the Spanish salary explains the demand and at the same time renders it irrelevant.

At that point, exactly there, the analysis gets stuck. No one has a mechanism that would return the city centre to those who work in it without dismantling what made it attractive.