madrid —
Major cities of value usually boast their own exclusive areas. New York has Fifth Avenue, Paris has the Champs-Élysées, and Madrid features a prominent area known as the Golden Mile.
The Golden Mile is a network of streets in the Salamanca district of Spain’s capital that is home to some of the world’s most exclusive clothing and jewelry brands. It is an environment that attracts foreigners keen to invest in housing, the majority of whom come from Latin America.
“This is like an open-air shopping mall,” Cristina Lanzarotto, director of Madrid’s Salamanca Neighborhood Merchants Association, which has about 100 luxury stores in the area, told CNN. “(The mall) is one of the most special shopping malls in the world, if not the most special.”
The Golden Mile is not the only place where foreigners gather. This trend extends to the six districts that make up the Salamanca district, and is evident when walking through its streets, where wide streets and grand buildings enchant pedestrians with an elegant atmosphere.
The real shock comes with the cost of living, which includes not only the cost of an afternoon of luxury shopping, but also the cost of housing. According to figures compiled by the Madrid City Council in February, this area has the highest price per square meter in all of Madrid, at more than $11,500, compared to the citywide average of $6,800.
These numbers will scare many Spanish buyers, but they are within reach of foreign wealth, which has grown in importance in the area over the past decade. So much so that they are helping drive what Tarek Mouret, an advisor at Salamanca real estate firm Gilmar, describes as an “unusual” form of gentrification. He says, “It’s not gentrification from poor to rich, it’s gentrification from rich to richer.”
In 2015, foreign-born residents made up 18% of the district’s population. According to City Council data, by 2025 they will account for nearly 30%.
What stands out is that of the district’s 44,680 foreign residents, almost half – 21,740 – come from South American countries. “Now, instead of going to Miami, all that good fortune is coming to Madrid,” Lanzalotto said. According to 2025 data from the Madrid City Council, the district has a total of 3,549 Mexican residents.
Lanzarote cites the “beauty of neoclassical architecture” and “the language, safety, and the possibility of walking around calmly” as some of the reasons for the influx of foreign wealth.
To break into the Madrid-area real estate market, buyers need deep pockets, and Mure says people coming from Latin America have just that.
They are “huge” and “impossible to match,” he says, illustrated by the recent sale of a 460 square meter (4,950 square foot) apartment in Plaza Independencia, home to the iconic Puerta de Alcalá, for more than $18 million.
“If you’re buying a second home that’s not new construction, you’re talking about $35,000 or $39,000 per square meter,” Mouret elaborates, adding that buyers are spending an average of $2.3 million to $4.6 million per property.
These wealthy buyers also tend to share preferences for certain amenities, such as homes facing the outside, open kitchens and living areas, and large bedrooms with private bathrooms. Because, as Mure says, “They have an active social life and are always inviting people into their home.”
These new influxes of wealth ultimately led to changes in the region’s commercial ecosystem. “There are now more luxury stores opening and an incredible increase in very important international jewelry stores,” Lanzarotto points out.
This change also changed the habits of the people who had lived in the area for many years. “If you go looking for beer in a nice place with good tapas, you can’t find it anymore, at least not in Recoletos,” Mouret says. “Nowadays, there are all these designer restaurants where a beer costs $18 and they don’t serve anything with it.”
As an example, Mouret points out that some former residents of the Salamanca area have chosen to invest their proceeds in chalets in the upscale developments of La Moraleja, adjacent to the city of Alcobendas, and El Viso, a neighborhood in the Chamberí area.
However, as Mure points out, this trend is also creating a ripple effect in that real estate prices rise in the areas where displaced people eventually settle.
