Information and advice on what you need to know before buying a property in Madrid.

The capital of Spain, Madrid, has a population of 3.2 million and is the centre for much of the country's leisure and business activities.

Located on the Manzanares River in the centre of Spain, Madrid stands between the autonomous communities of Castile and Leon and Castile-La Mancha.

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As a business centre, the city is home to the vast majority of large Spanish companies, as well as three of the biggest firms in the world - Telefonica, Repsol-YPF and Endesa.

Tourists also flock to Madrid, attracted by its cultural destinations and historic neighborhoods and squares, such as the famed Plaza Mayor and Puerta del Sol. In particular, visitors are often wowed by the Golden Triangle of Art - three museums located along the Paseo del Prado.

Among these, the Prado is the most popular and contains highlights such as Diego Velazquez's Las Meninas and Francisco de Goya's La maja vestida and La maja desnuda

Elsewhere in the city, the Gran Via remains one of Europe's premier shopping streets, as notable for its impressive architecture as it is for the boutiques and shopping malls.

Madrid is also celebrated for its vibrant nightlife. Local residents are famous for partying through the night and heading off to work the following day. Some of the city's most famous nightspots are centered in the Bilbao, Tribunal, Alonso Martinez and Moncloa.

Pros of Investing in Property in Madrid

Over the last decade house prices in Spain in general and Madrid in particular have increased significantly.

In fact, the latest figures indicate that property in the city currently costs 4,277 euros per square metre.

As with any city, some areas are more expensive than others. Figures from idealista.com showed that Salamanca (5,435 euros per square metre), Chanartin (5,254 euros per square metre), Centro (4,710 euros per square metre) and Tetuan (4,192 euros per square metre) remained some of the most expensive areas in Madrid for people to buy a property.

In contrast, the data shows that bargains can still be found in the districts of Villaverde, Latina and Puente de Vellecas, where buyers can find homes for less than 3,100 euros per square metre.

Cons of Property Investing in Madrid

The Spanish property market is not expected to perform particularly well over the coming few years. Prices have risen at a faster rate in Spain than in any other European country over the last five years, doubling in many parts of the country. As a result, the country has become very over-developed in parts - and this surplus in supply is expected to result in an overall market slowdown.

In fact, idealista's research found that two-thirds of the regions in Madrid recorded price falls in the third quarter of 2007. In particular, the site found that prices in Alcobendas dropped by 9.1 per cent compared to the previous quarter. Experts have suggested that some owners previously overvalued their properties and have recently readjusted their asking prices.

What You Need to Buy Property in Spain

Anyone buying a property in Spain requires a NIE number - a unique taxation identification number needed before you can buy a property or open a bank account.

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