The high-end real estate market is shifting, and one European city is at the forefront of this trend.
Madrid has claimed the top spot in the 2025 Barnes City Index, a global ranking of the most sought-after cities among ultra-high-net-worth individuals seeking attractive, practical, and financially savvy locations.
Spain’s capital rose to the top due to several factors. Aside from a laid-back lifestyle and pleasant weather, the city also offers top-notch healthcare, an efficient and well-oiled transport system, quality education and low crime rates.
Madrid also ranks fourth among European cities in terms of the number of multinational HQs.
What’s the price tag for Madrid’s luxury real estate market?
The price tag is as high as €7.000/square metre (m²) for a premium apartment in the charming Chamartín district, or €1 million for a 100 m² flat in the charming Chamberí district.
“Madrid’s appeal as a centre for high-end real estate continues to grow”, says Barnes Spain director Alvise Da Mosto. “With a favourable investment climate and a steady increase in the number of foreign buyers, the city is consolidating its status”.
However, Da Mosto adds that Madrid’s positive position in the real estate market could be in peril due to the Spanish government’s plans to tax non-European buyers’ property purchases.
Why is Monaco still a favourite despite astronomical prices?
The French-speaking microstate nestled on the Côte d’Azur is home to some of the highest real estate prices in the world, ranging from €40,000 to €100,000/ m².
Rates have grown by around 38% in the last ten years. With €1 million, buyers might only be able to afford a 25 m² studio in an average luxury building.
But Monaco remains a favourite among the wealthy due to its reputation for being very safe, including complete CCTV coverage and the highest ratio of police officers per inhabitant in the world.
And, of course, it charges no income, capital gains or inheritance tax for individuals.
Milan: Matching prestigious estate and ‘reasonable’ prices
Milan rounds up the top five, just after Monaco. Italy’s financial capital climbed 17 spots from last year.
According to Barnes, €1 million should be enough to land you a 120 sq m² apartment in the Centro Storico, Milan’s old medieval centre.
The Lombard hub snatched a top-five spot thanks to a “highly diversified market” that offers renovated century-old palaces as well as sleek modern residences equipped with top-level amenities.
Barnes calls the city’s prices “reasonable” for prestigious real estate (from €9,000/m² to €21,000/m² for exceptional properties)
“In less than a generation, Milan has dusted off its image to establish itself as one of the major destinations on the world map of prestige real estate. The quality of life in its historic centre is incomparable”, says Barnes Italy Business Development Luca Pietro Ungaro.
Madrid and Milan driving ‘silent revolution’ in upscale real estate
The Index describes a new trend in the luxury real estate market whereby history and heritage matter more than the sole infrastructural value.
“Madrid or Milan meet the expectations of ultra-high net-worth individuals, who prefer authentic destinations where they can immerse themselves in the art of living, while benefiting from solid fundamentals, such as quality schools and universities, modern infrastructure and significant value-added potential”.
The real estate company says investors are being driven by the “seven Rs”: resell, repair, renovate, rehabilitate, reuse, recycle and reinvent.
“We’re witnessing a silent revolution, a craze for movable and immovable assets that have a past and a soul”, the report reads, noting that customers are now looking for properties that have been renovated or transformed, maximising their value while respecting their history.
When it comes to other cities, the Greek capital of Athens jumped an impressive 17 spots to place 16th from last year’s 33rd place.
Meanwhile, Lisbon dropped to 25th following 2024’s remarkable 8th place.
Washington, D.C. witnessed a similar decline, slipping down 30 spots to rank 50th in 2025.
