Madrid’s Jerónimos, sandwiched between Retiro Park and the tree-lined boulevard of Paseo de Prado, is small and peaceful, yet it packs a punch: Some of Madrid’s most iconic buildings and public spaces, including the Prado Museum, Parque del Buen Retiro, a.k.a. Retiro Park, and the Ritz Hotel, reside in this prestigious neighborhood.
The area is one of the world’s "neighborhoods to watch" in terms of prime real estate in 2018, according to Knight Frank.
Jerónimos is one of the city’s most expensive neighborhoods, too, with properties selling for up to €10,000 (US$12,090) per square meter, said Paloma Pérez, managing director at Engel & Volkers Madrid.
Average prices in Jerónimos have increased 10% from €3,489 per square meter in 2016 to €3,931 (US$4,749) per square meter in 2017, according to data from Engel and Volkers. Prices are now 18% lower than their peak in 2006 when the average price was €4,424 ($5,359) per square meter.
Meanwhile, sales transactions increased by 19% during the 10-month period of January through October 2017, as compared with the same time in 2016, according to data from Lucas Fox compiled from a range of sources.
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Strong price growth in the area is being driven by increased demand from foreign buyers, coupled with low inventory, according to agents, who said Madrid is now firmly on the radar of global investors.
Up until recently, people buying properties in Madrid as an investment have mainly been Spanish. Now, the city has become more international and appeals to a wide range of nationalities.
Over the past three years, the Spanish authorities have started to develop the city’s tourism brand, said Rod Jamieson, director of estate agent Lucas Fox Madrid.
With Spain’s economy back to pre-crisis size and removed from Barcelona’s Catalan crisis in Barcelona, Madrid has become an appealing location for investors. It’s the third largest capital in the E.U. after London and Berlin. And prices are rising, yet they are still below their peak in 2007, offering potential for mid- and long-term capital growth, according to agents.
Mr. Jamieson added that Madrid appeals to those who are into city living and want a weekend pad. "Madrid has a great year-round climate, has history and is excellent for galleries, gastronomy and shopping," he said.
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Boundaries
Jerónimos is a small, rectangle-shaped neighborhood between Retiro Park and Paseo de Prado east of the city center.
Calle de Alcala forms its northern edge, with Cibeles Palace, a palace by a plaza with marble sculptures and fountains, on its western end and Puerto de Alcala, an 18th-century triumphal arch, on its eastern end.
Calle de Alfonso XII runs the full length of its eastern edge and has four gates giving access to Retiro Park, while the Royal Botanical Gardens of Madrid forms its southern edge.
Paseo de Prado, one of the Madrid’s main boulevards, makes up its western border, with the Fountain of Neptune in the middle.
Price range
Jerónimos is one of the most expensive areas in the city of Madrid and its prices are on par with Salamanca, the city’s most upmarket neighborhood, which is home to a wealth of upscale shops, restaurants and bars.
An apartment extending to 360 square meters (3,875 square feet) sells for €10,000 (US$12,029) per square meter, or would rent for €7,000 (US$8,420) a month, according to Ivan Barrondo, of estate agent John Taylor.
"A 150-square meter (1,614 square feet) renovated apartment costs €4,000 (US$4,811) per square meter and an unmodernized 180-square-meter (1,937 square feet) home is priced at €3,000 (US$3,609)," he said.
Agents said buyers will pay a premium of between 10% and 30% for a home with direct views of Retiro Park, such as those on Calle de Alfonso XII.
The average property in Jerónimos is between 200 square meters (2,100 square feet) and 400 square meters (4,300 square feet) and has a sale price of between €2 million and €4 million (US$2.4 million and US$4.8 million), Ms. Perez said.
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Housing stock
Jerónimos has apartment buildings that are grand-looking and have big proportions.
Featuring classic, decorative facades and mostly dating from the 19th-century, they have a Spanish aesthetic, yet are also reminiscent of the architecture of the Haussmann buildings in Paris.
In buildings of usually no more than six stories, the apartments have high, corniced ceilings, and large windows opening onto wrought-iron balconies, along with parquet flooring.
Though it is a compact area, with a small number of streets, it is home of some Madrid’s most beautiful buildings, Mr. Jamieson said.
Outside space is in short supply, with most homes only having Juliet balconies, which offer views of the street but no space for seating, according to agents.
Penthouse apartments, easily accessible now that most buildings have been fitted with elevators, have large terraces with space for dining and sweeping views, which makes them hugely desirable.
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What makes it unique
Jerónimos has a great, central location, with Madrid’s most famous park, Retiro Park, the classically upscale district of Salamanca, and the city center within walking distance.
Compact, peaceful and mostly residential, and home to beautiful green spaces, it is surrounded by the city’s most important art galleries and grand civic buildings and monuments, giving it a cultured, refined atmosphere.
Its proximity to the Retiro Park and the city’s Golden Triangle of Art, the Prado Museum, Reina Sofia, which is home to Pablo Picasso’s mural-sized painting "Guernica," and Thyssen-Bornemisza Museum, gives it enduring appeal.
The 350-acre park comes alive on the weekends, with families taking leisurely strolls and picnicking on the landscaped lawns, and its paths used by runners and cyclists.
Roy Lichtenstein Brushstroke sculpture in covered plaza of Reina Sofia National Art Museum
Bruce Yuanyue Bi / Getty ImagesMore:Pablo Picasso’s French Riviera Mansion Has a New Owner
Luxury amenities
Jerónimos’s wealthy residents are well catered for. It has the Hotel Ritz, a recently refurbished five-star hotel run by Mandarin Oriental Hotel Group that offers classic luxury and a wellness suite.
Dining spots are mainly high-end restaurants. Highlights include Viridiana, run by chef Abraham Garcia, who has a created a menu of innovative modern Spanish dishes, and Restaurante Alabaster, a contemporary dining spot serving traditional Spanish dishes using Galician ingredients.
Horcher, which serves continental cuisine in ambient period surroundings, is well regarded. There’s also the Ritz Garden and the Goya Restaurant and Terrace at the Hotel Ritz; García de la Navarra, a restaurant and wine bar; El 17 de Moreto, a cozy restaurant that has tapas and brunch menus;and Murillo Café, a Mediterranean bistro.
Jerónimos is not known for its nightlife, but it is a five-minute walk from Salamanca, which is packed with restaurants, along with bodegas (wine bars). Calle Serrano, which is just north of Calle de Alfonso XII, is Madrid’s best shopping street.
Evening life main square of Salamanca
Albert Engeln / Getty ImagesTop international private schools in Madrid attend by residents of Jerónimos include Endaze British International School, a co-ed school with a British curriculum (for ages 3 to 11 years); International College Spain, a co-ed school offering an International Baccalaureate (IB) curriculum (ages 3 to 18 years); The American School of Madrid, a co-educational school offering an American curriculum with IB and Spanish options (ages 3 to 18 years); and the British School King’s College in Madrid, a co-ed school with a British curriculum (ages 2 to 18 years).
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Who lives there
Traditional old-money families, the political elite and wealthy second-home buyers live in the area.
This area, along with Salamanca, has been the preferred choice of wealthy Spanish families looking for a main residence, according to Ms. Perez.
It has, in recent years, also become popular with overseas buyers, who have either relocated to the city for work or have bought a property to use as a holiday home.
Agents said that newcomers are mostly from Latin American countries such as Venezuela, Mexico and Colombia. North Americans, the French and British also own homes in the neighborhood.
Notable residents
Spain’s most famous celebrity couple, Hollywood actors Penelope Cruz and Javier Bardem share a home in the neighborhood.
It has long been popular with the political elite, too. Felipe Gonzalez, who was Spain’s prime minister from 1982 to 1996, has a residence here.
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Outlook
With a flourishing national economy, low mortgage rates and growing international appeal, Madrid’s property market is expected to perform well next year.
Madrid has become the fastest growing market in Spain, with price rises of 15% in 2017 and an expectation of another 10% in 2018, according to Engel & Volkers.
Agents agree that prime areas such as Jerónimos will see the biggest gains in capital growth. It is expected that the area will experience an increase of another 10% in 2018, according to Engel & Volkers.
Sellers in Jerónimos have the upper hand because there are so few homes on the market. People who own homes in the neighborhood like to hold on to them and new developments are in rare.