Housing prices in Madrid have increased by 9% year-on-year, raising concerns among experts about a potential risk of a real estate bubble. However, a report from UBS asserts that the risk is moderate.
The increase in housing prices in Madrid, which has reached **9% year-on-year**, has led many to question whether the capital is experiencing a real estate bubble similar to that of 2007. However, according to a recently published report by **UBS**, the risk of a bubble is currently moderate.
This study points out that the shortage of supply is driving valuations, although it warns that affordability has deteriorated as prices have outpaced the growth of rents and incomes. "The financial justification for buying increasingly depends on expectations of future capital gains," states the report.
Despite the upward trend, UBS indicates that price growth began to slow down in the spring of 2026, when financing costs increased and stricter regulations on short-term rentals were implemented, weighing on demand.
Compared to other capitals, Madrid has a lower bubble risk than cities like **Paris** and **London**, where the risk is rated as low. On the other hand, **Zurich** and **Tokyo** lead the cities with the highest risk, according to the same report.
In conclusion, although Madrid has recorded a notable increase in housing prices, the current assessment suggests that the risk of a real estate bubble is moderate, which could offer some relief to potential buyers in the market.
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