Madrid ended December with a striking figure on the rental map: the La Paz neighborhood, in the Fuencarral-El Pardo district, was the area of the capital where rents fell the most, with drops of around 18% compared to the previous year, according to the latest report from Fotocasa.
Despite the decline, it remains a medium-high income neighborhood, with an abundance of high-rise buildings and residential developments next to La Paz Hospital and Parque Norte, where three-bedroom apartments easily exceed 100 square meters and rent for an average of just over €1,500 per month.
Why rents are falling so much in La Paz
Editorial credit: Fotocasa
The 18% drop in La Paz contrasts with the more moderate adjustment in Madrid as a whole, where rents have fallen by just 1.4% annually and the price per square meter remains above €20 per month. In this neighborhood, the adjustment is explained by a combination of factors: an increase in supply following the release onto the market of properties previously intended for temporary or luxury rentals, greater willingness on the part of landlords to negotiate, and a demand that, with interest rates stabilizing, is once again looking more strongly towards buying rather than renting.
The area around La Paz Hospital and the Castellana towers had experienced a sharp rise in prices in recent years, driven by healthcare professionals, families with high purchasing power, and workers in nearby offices, but the latest data points to a phase of price correction, especially for large apartments of more than 100 square meters. Even so, the area maintains a very good level of services and connections, with metro lines, the M-30 ring road, schools, and shopping centers nearby, leading experts to believe that prices may have bottomed out.
Looking at active listings, there are not many bargains in La Paz, but there is a noticeable drop from the highs of previous years: portals such as idealista and Fotocasa place the average price per square meter between €18 and €19, slightly below the average for the capital. Translated into a typical apartment, rents for two-bedroom properties of around 70-80 square meters range from just over €1,100-1,200 for older or simpler properties to €1,400-1,500 for renovated homes.