Israeli investors and developers continue betting heavily on Madrid's real estate market, even as diplomatic relations between Spain and Israel go through one of their roughest patches. Firms including Genesis Investments, Argis and IBI Investment House have channeled hundreds of millions of euros into the Spanish capital in recent years, drawn by prices and permitting timelines they consider more favorable than other European markets.
Nadav Berkovitz, an analyst at IBI Investment House, summed up the logic many of these investors follow: "People need to separate the government from business and from" people on the street, saying the Spanish government's stance toward Israel does not, in his experience, translate into rejection from the business sector or society in major cities.
Argis, whose capital is roughly 70 percent Israeli, already manages about 1.5 billion euros in assets and has invested more than 1.1 billion euros since its founding across more than 3,500 housing units. Genesis Investments, co-owned by Ariel Mazuz, has moved around 250 million shekels, about 85 million dollars, across more than 18 projects, many of them focused on converting industrial and office buildings into housing rather than new high-rise construction.
Among the areas these investors have highlighted is the area around the Santiago Bernabeu stadium, along with conversion projects such as the Coruña 21 and Coruña 19 buildings. Average housing prices in Madrid are now approaching 6,000 euros per square meter, up from under 3,000 euros in the mid 2010s, against a backdrop of a 53 percent rise in prices across Spain since 2021 and a 38 percent rise in rents over the same period.
The investors themselves acknowledge the risks of the current political climate. Attorney Nir Shmoul recommends structuring investments through international rather than Israeli entities to reduce day to day exposure and avoid being targeted by pro Palestinian organizations. Experts also warn that final returns shrink considerably once Spanish purchase taxes of 6 to 11 percent, a 24 percent tax on rental income for non residents, capital gains taxes, and Israeli worldwide income reporting requirements are factored in.
The underlying appeal remains structural: Spain is projected to face a shortfall of around 725,000 homes by 2027, and its economy is expected to grow faster than the eurozone average this year, while some Madrid projects secure permits in around 90 days, compared with processes that can take years in Israel. Institutional investment in Spain's residential sector could approach 5 billion euros in 2026, according to estimates cited across the industry.