Published on and written by Cyril Jarnias
San Sebastián de los Reyes is attracting a growing number of investors seeking a dynamic market, well-connected to Madrid, with high rental yields and a quality of life tailored for families and professionals. Located just 18 km north of the capital, this city of over 90,000 inhabitants has established itself as a major residential and economic hub in Madrid’s northern crown, without being merely a bedroom community.
The local market offers a gross rental yield of around 6% and significant supply-demand pressure, supported by massive public investment plans and new development programs. However, a structured approach is required due to price variations between neighborhoods, the rapid increase in rents, and Spain’s specific tax framework.
This article offers a detailed dive into the San Sebastián de los Reyes real estate market, with precise figures, a neighborhood-by-neighborhood analysis, and concrete guidance on financing and taxation for a French-speaking investor.
A Growing Market in a City with High Real Estate Demand
San Sebastián de los Reyes combines several strengths rarely found together in a single municipality: strong economic activity, major commercial zones, direct connection to Madrid (metro, Cercanías commuter rail, A-1 highway), a network of SMEs and multinational headquarters (over 2,500 companies), and a highly developed green environment (Dehesa Boyal, banks of the Jarama river, numerous urban parks).
The population has increased by around 16% since 2013, meaning nearly 12,900 additional residents.
Nationally, prices have recently increased by over 12% per year, with a further average increase of 5 to 7% expected. Madrid is one of the country’s most expensive provinces, exceeding €3,600/m² on average, but San Sebastián de los Reyes remains more affordable than the capital while maintaining some of the highest rents in the region.
Key Figures of the Local Market
Various databases converge on a clear finding: the San Sebastián de los Reyes market is tight, with limited supply and strong rental demand.
Average Values and Profitability
The following approximate figures summarize the city’s residential market well:
| Key Indicator | Approximate Value |
|---|---|
| Average property price (all types) | €272,000 – €273,000 |
| Average monthly rent | €1,130 – €1,150 |
| Average gross rental yield | 5.8 – 5.9 % |
| Payback period (price/annual rent) | ≈ 20 years |
| Average price per m² (all sales, local ref.) | ≈ €3,300 – €3,400 /m² |
| Average rent per m² (local ref.) | €14 – €17 /m² /month |
| Market activity (index) | ≈ 51–52 % |
According to another more detailed dataset, the average price per m² for apartments is around €3,900–€4,100/m², and rents frequently exceed €17/m². In some segments (well-located small units, properties with parking or terrace), average rents can reach around €20/m².
For an investor, this translates to gross yields generally between 5% and 6.5%, with peaks beyond 7% for some well-targeted properties.
Rapid Increase in Prices and Rents
Price trends in San Sebastián de los Reyes show very strong growth in recent years.
For apartments:
| Year | Average Price per m² (Apartments) | Annual Change |
|---|---|---|
| 2022 | ≈ €2,940 – €3,180 /m² | — |
| 2023 | ≈ €3,145 – €3,370 /m² | +6–7 % |
| 2024 | ≈ €3,655 – €3,890 /m² | +15–16 % |
| 2025 | ≈ €4,120 – €4,290 /m² | +10–13 % |
For houses:
| Year | Average Price per m² (Houses) | Annual Change |
|---|---|---|
| 2022 | ≈ €2,775 – €3,635 /m² | — |
| 2023 | ≈ €3,110 – €4,030 /m² | +11–12 % |
| 2024 | ≈ €3,520 – €4,400 /m² | +9–13 % |
| 2025 | ≈ €3,900 – €4,730 /m² | +8–11 % |
On the rental side, the progression is equally marked: in one year, the average rent per m² went from around €12.4/m² to over €17/m² in some data series, a rise of nearly +38% over the reference period. Over a two-year window, the lowest observed rents were around €11/m², compared to peaks above €17/m² in the most recent months.
This rental pressure is reinforced by the fact that San Sebastián de los Reyes is, at certain times of the year, the second most expensive rental market in the entire Community of Madrid after the capital, surpassing renowned municipalities like Pozuelo de Alarcón or Alcobendas in some segments.
What Yields Can You Expect by Property Type?
Not all properties offer the same performance. Available data allows for a fairly detailed comparison of studios, small apartments, and large units.
Yields by Property Type
A first aggregated dataset provides the following overview:
| Property Type | Average Price | Average Monthly Rent | Gross Annual Income | Gross Yield |
|---|---|---|---|---|
| Entire Stock | €272,000 | €1,150 | €13,800 | 5.89 % |
| Studio | €199,900 | €950 | €11,400 | 5.70 % |
| 1 Bedroom | €215,000 | €1,200 | €14,400 | 6.70 % |
| 2 Bedrooms | €328,000 | €1,450 | €17,400 | 5.30 % |
| 3 Bedrooms | €367,000 | €1,650 | €19,800 | 5.40 % |
| 4 Bedrooms+ | €490,000 | €2,900 | €34,800 | 7.10 % |
A second set of figures, from another source, shows slightly different yields but confirms the main trends:
| Property Type | Average Price (other source) | Average Monthly Rent | Gross Yield |
|---|---|---|---|
| Studio | €198,000 | €900 | 5.45 % |
| 1 Bedroom | €225,000 | €1,100 | 5.87 % |
| 2 Bedrooms | €308,720 | €1,500 | 5.83 % |
| 3 Bedrooms | €367,000 | €1,750 | 5.72 % |
| 4 Bedrooms+ | €369,500 | €2,175 | 7.06 % |
– Even accounting for methodological variations, two conclusions stand out clearly:
– smaller units (studios, 1-bedrooms) offer a higher yield than standard 2-3 bedroom apartments,
– large units (4 bedrooms and more) can offer a gross yield exceeding 7%, especially when targeting affluent families or shared housing.
For a purely rental-focused investor, 1-bedroom properties and well-positioned large units offer the best gross profitability. However, it is crucial to consider the entry ticket price and the risk of vacancy, which is higher for very large units.
A Price Map with Stark Contrasts Between Neighborhoods
Investing in San Sebastián de los Reyes does not mean the same thing depending on whether you look at the historic center, the newer family-oriented neighborhoods, or the large housing developments.
Reference data shows strong price differences per square meter, both for sale and for rent.
Price per m² by Zone
Based on values observed around August 2025, we get the following distribution:
| Neighborhood / Zone | Sale Price €/m² | Rent €/m²/month |
|---|---|---|
| Casco Antiguo (Old Town) | €3,418 | €16.96 |
| Vega de la Moraleja | €4,260 | €17.68 |
| Ciudalcampo – Fuente del Fresno | €3,051 | €16.32 |
| Dehesa Vieja – Puente Cultural | €3,871 | €10.91 |
| Arroyos y Tempranales | €3,651 | €14.67 |
| Ensanche – Praderón – Alamillos | €3,754 | €19.31 |
– We can clearly see that:
– Vega de la Moraleja is the most expensive zone to buy in, in line with the neighboring, very upscale La Moraleja, but with rents that remain high.
– Ensanche–Praderón–Alamillos dominates the rental market with the city’s highest rents.
– Dehesa Vieja–Puente Cultural presents an interesting situation: high sale prices, but lower average rents, which somewhat compresses the gross yield.
The maximum gross yield achieved by studios in certain real estate sectors.
Focus on Key Neighborhoods
Dehesa Vieja is often cited as one of the best sectors to live in. It is the extension that served as a model for the city’s recent urban planning, with over 7,000 homes built, many of which are subsidized housing. It’s a very family-oriented area, close to green spaces (Dehesa Boyal) and well-served by amenities.
The Los Tempranales neighborhood has been developing since 2009 with a model of recent residences featuring large homes. School and health facilities are planned. Currently, several commercial premises are still vacant or in the process of being developed, representing long-term opportunities as local services become denser.
Fuente del Fresno, backing onto the La Moraleja golf course, is a large, green, and secure development with 24 km of internal roads, sports facilities, and a high-quality landscaped environment. It’s a prime destination for high-income families, more oriented towards primary or secondary residence than towards maximum gross rental yield investment, but with strong long-term appreciation potential.
The Centro Urbano (city center) blends tradition and modernity, with a remarkable transport network (metro, bus, nearby Cercanías), and prices per m² slightly lower than those in the most upscale neighborhoods, making it a good compromise between liquidity, rental demand, and budget.
Comparison with Madrid, Spain, and Neighboring Cities
Investing in San Sebastián de los Reyes makes complete sense when comparing its parameters to those of Madrid and the rest of Spain.
On the rental side, the national average gross yield was around 6.7% in summer 2025, compared to 5.8–5.9% in San Sebastián de los Reyes according to sources. This is therefore slightly below the Spanish average, but in a zone with very strong demand, where the risk of vacancy is structurally low.
In San Sebastián de los Reyes, average sale prices per m² range between €3,300 and €4,100, representing a significant gap compared to over €4,700/m² in Madrid.
Within the Community of Madrid, the municipality ranks among the most expensive rental markets, just behind Madrid capital, and ahead of towns like Pozuelo de Alarcón or Alcobendas on some indicators. On the purchase price side, it remains comparable to or slightly higher than Alcobendas (≈ €2,975/m² on average), reflecting its status as a full-fledged residential growth hub.
Cost of Living, Household Profile, and Rental Demand
For an investor, understanding the local purchasing power and resident profile is essential, as these determine the type of properties that rent best.
Estimates indicate a relatively high cost of living on the Spanish scale. A total monthly budget of around $1,800 is cited for a single person, and over $4,200 for a family of four, including housing. Excluding rent, monthly expenses would be around $700–$750 for one person and over $2,300 for a family.
The net median salary in France is about €1,800 per month.
This income profile supports rents around €900–€1,200 for a 2-bedroom and €1,200–€1,500 for a 3-bedroom, which corresponds well to observed levels. Families and young professionals seeking a compromise between proximity to Madrid and a family environment therefore constitute the core of rental demand.
The New Build Boom: Residential Programs and Major Urban Projects
The San Sebastián de los Reyes market is not limited to resale. The city is clearly in a phase of real estate development, with many new projects and public affordable housing schemes.
Major Public Programs
The Madrid region is investing over €210 million in the municipality to strengthen infrastructure and public services. Among the key projects:
– construction of a new health center in Dehesa Vieja (over €6 million),
– improvement of existing health centers, including Reyes Católicos,
– creation of a new public high school (the sixth in the city) in Los Tempranales, with a €13 million budget, offering middle school, high school, and vocational training,
– program of expansion and renovation in several public schools and nurseries,
– launch of a polytechnic campus focused on science and technology,
– massive investment in social services, including over €16 million for the elderly, with a new residence and a day center.
Number of affordable homes already delivered under the ‘Plan Vive’ program in San Sebastián de los Reyes.
This development of a subsidized rental stock has a dual effect: it creates a supply of capped rents for young people, but it also confirms the diagnosis of strong residential pressure in the municipality.
The Cerro del Baile Project: A New Piece of the City
The “Cerro del Baile” project embodies this dynamic. It plans for the construction of 3,664 new homes, of which 60% will be subsidized housing. The area is located near the Dehesa Boyal sports complex and The Style Outlets shopping center, with the creation of an ecological park of nearly 295,000 m² (over 8,000 native trees) and new neighborhood parks.
– Key administrative milestones have been passed:
– partial plan approved,
– reparcelling project validated,
– urbanization project under approval.
Housing deliveries are anticipated for around 2027–2028, with several developments already being marketed:
| Development (Cerro del Baile examples) | Main Typology | Indicative Starting Price |
|---|---|---|
| Villas de la Dehesa (Proel) | 59 houses / 4 bedrooms | From €799,000 |
| Mirador de la Dehesa (Proel) | 87 homes 2–3 bedrooms | From €469,000 |
| Resid. Parque de los Robles (VPPL) | 80 homes 2–3 bedrooms | From €315,000 |
| Rincón de la Dehesa (Serprocol – VPPL) | 2–3 bedrooms | From €283,000 |
| VIVE Cerro del Baile (cooperative VPPL) | 80 homes 2–3 bedrooms | Capped/regulated prices |
These products are clearly positioned in the upper-middle to affluent class segment, with a significant portion of price-limited (VPPL) housing whose potential long-term capital gain can be interesting, subject to the specific rules associated with this status.
Other New Programs and Opportunities
Beyond Cerro del Baile, a multitude of more compact projects offer investment opportunities:
Discover a selection of new developments in Alicante, ranging from affordable apartments to high-end residences.
Apartments from 42 m² starting at €169,000 up to 3-bedrooms around €289,500.
56 homes in the Praderón neighborhood, including 2-bedroom duplexes and lofts, starting around €253,000.
Metropol One (25 lofts and 6 penthouse 2-bedrooms), Residencial Acacias (38 lofts from ~€195,600), Rincón de la Dehesa (subsidized version, 3-bedrooms from €363,700).
High-end program with large apartments: 134 m² from €897,000, and 187 m² from €1,064,000.
Most new projects referenced for the 2024–2028 horizon show an average price around €390,000, with a starting ticket close to €169,000 for the smallest units, and a luxury segment above €900,000.
For an investor, these projects offer several advantages: better energy efficiency (premiums on rents and loan rates), attractiveness for demanding tenants (families, professionals), and long-term visibility on appreciation, in a context of scarce new supply nationally.
Commercial and Logistics Market: Another Facet of Investment
San Sebastián de los Reyes is not just a residential market. Its strategic location north of Madrid, its proximity to Barajas Airport, and its high concentration of industrial parks (Polígono Industrial Norte y Sur, Los Berrocales, areas around Megapark and Plaza Norte 2) also make it an interesting playing field for tertiary and logistics real estate.
Overview of key data on prices, supply, and rents for commercial and professional spaces.
The average acquisition price is about €2,656 per square meter.
The supply includes offices, showrooms, warehouses, and coworking spaces, with areas ranging from a few hundred to over 100,000 square feet.
Rents, often in $/sq ft, place the city in the upper-middle range of the Spanish market, below Madrid city center prices.
Ground-floor premises of 500 to 600 m² in expanding residential neighborhoods like Tempranales are offered for sale or rent, often in areas still under-equipped with local retail. For an investor focused on neighborhood retail (healthcare, dining, private education, sports), it may be interesting to position themselves on these assets before these zones reach their commercial maturity.
Financing an Investment in San Sebastián de los Reyes
Financing follows the general rules of real estate credit in Spain, with some nuances for non-residents.
Spanish banks offer fixed-rate, variable-rate (indexed to Euribor), or mixed mortgages. For a tax resident in Spain, the loan-to-value (LTV) ratio can reach 80%, or even 90% for a primary residence. For a non-resident, expect 50 to 70% LTV, which implies a personal contribution of 30–50% of the price, plus purchase costs (10–14%).
Recent fixed rates observed for top-profile non-resident borrowers in France.
Banks systematically evaluate the debt-to-income ratio, aiming to keep credit charges (including those outside Spain) below 30–35% of net income. For income in foreign currency, some banks lower the LTV or require currency hedging.
In this context, a €250,000 apartment in San Sebastián de los Reyes, financed at 65% over 20 to 25 years, remains accessible for a household or investor with comfortable income, especially as local rents (€1,100–€1,500/month) generally allow covering a good portion of the monthly payment.
Taxation: What an Investor Needs to Anticipate
Spain applies a structured real estate tax system in three stages: upon purchase, during ownership, and upon resale. San Sebastián de los Reyes, part of the Community of Madrid, follows its regional scales.
At Purchase
Acquisition costs add approximately 10 to 15% to the net seller’s price, depending on whether it is a new or existing property.
– For a new home:
– VAT (IVA) of 10% on the sale price (21% for commercial premises or vacant land),
– Stamp Duty (AJD) around 0.75% in the Community of Madrid,
– notary, land registry, lawyer fees, bringing the total to around 13–14%.
– For an existing home (resale):
– Property Transfer Tax (ITP) of 6% in the Community of Madrid, calculated on the higher of the cadastral reference value or the price,
– notary, registry, lawyer… for a total generally between 10 and 12%.
During Ownership
Every property owner in San Sebastián de los Reyes pays a local property tax, the IBI, calculated on the cadastral value of the property, with a rate generally between 0.4% and 1.1% for urban properties, set by the town hall. Homeowners’ associations (communidades) charge community fees in parallel (€50 to €300 per month depending on services: pool, gardens, security, etc.).
Non-residents who own property in France are taxed on a theoretical rental income, even if the property is not rented. This imputed income is calculated as a percentage of the cadastral value (1.1% or 2% depending on the revision date). The tax is then levied at the Non-Resident Income Tax (IRNR) rate: 19% for EU/EEA residents and 24% for other non-residents.
In case of actual rental, non-residents declare their net rental income (after deductible expenses for Europeans) via the IRNR, at the same rate of 19% or 24%, through a quarterly declaration.
The wealth tax applies if the net value of assets in Spain exceeds €700,000, with a progressive scale from 0.2% to 2.5%. Non-residents can opt for the tax rules of the region where the bulk of their Spanish assets are located, such as the historically favorable Community of Madrid, although this framework may evolve.
Upon Resale
The capital gain realized upon resale is subject to Non-Resident Income Tax at the flat rate of 19% (EU/EEA) or 24% (non-EU/EEA), calculated on the difference between the sale price and purchase price, after accounting for acquisition costs and some documented renovation expenses.
Additionally, the municipality levies a local tax on the increase in land value (plusvalía municipal), based on the increase in the land’s value since acquisition. The calculation can follow an objective method (cadastral and holding period) or a method closer to the actual gain, with the seller able to choose the more advantageous formula.
When the seller is a non-resident, the buyer is obligated to withhold 3% of the sale price and pay it to the Spanish Treasury as an advance payment on the capital gains tax. The seller then regularizes their situation: if they owe less, they reclaim the difference; if they owe more, they pay the balance.
Why Demand Should Remain Strong
Several factors suggest that real estate demand in San Sebastián de los Reyes will remain strong in the coming years.
First, the Spanish macroeconomic context remains favorable, with economic growth forecast around 2% per year, above the Eurozone average, a dynamic job market, and gradually declining inflation. The Bank of Spain, the IMF, and the European Commission concur on this diagnosis.
Second, the structural housing deficit at the national level, the persistent slowness of new construction starts compared to the formation of new households, and the appetite of foreign buyers maintain upward pressure on prices, particularly in large metropolitan areas.
The annual demand for new housing in the Community of Madrid until 2030.
– Finally, the municipality cumulates concrete advantages:
– access to Madrid in about 30 minutes by commuter train (Cercanías C‑4) and metro (line 10),
– direct connection to the A‑1, Madrid’s ring road, and radial highways,
– proximity to Spain’s largest airport (Madrid‑Barajas),
– vast commercial offering (Megapark, Plaza Norte 2, La Viña, The Style Outlets, restaurants, cinemas),
– complete educational facilities (17 nurseries, 13 public primary schools, 5 public middle/high schools, private schools, and Official Language School),
– rich natural environment (Dehesa Boyal, urban parks, Jarama, Desert City).
All this makes the city very attractive for families with children, professionals seeking a better price-to-space ratio than in Madrid, and businesses.
Investment Strategies: What Trade-offs to Make?
Faced with this profusion of data, how can an investor define a coherent strategy in San Sebastián de los Reyes?
Several approaches emerge.
Targeting Maximum Gross Yield
– For those primarily aiming for yield, the data indicates that:
– 1-bedroom apartments and certain well-located small units often offer 6–6.7% gross yield,
– large units (4 bedrooms and more) frequently reach 7% and more, especially in reputable family and residential areas.
These products are found more in neighborhoods like Ensanche–Praderón–Alamillos, certain segments of Dehesa Vieja, or developments like Fuente del Fresno, provided rents are adjusted to local purchasing power or the expatriate market.
Betting on Long-Term Appreciation
– For others, the main goal is medium or long-term capital gain. In this case, bet on:
– neighborhoods in transition or development (Los Tempranales, Arroyos y Tempranales, Cerro del Baile),
– new, high energy-efficiency programs (which benefit from better loan conditions and price premiums, and appeal more to tenants),
– price-capped subsidized housing (VPPL, VPP), subject to mastering the resale and occupancy constraints well.
A rental investment may present a lower initial yield if one prioritizes developing areas. This choice can be offset by a stronger increase in the price per square meter, especially if local infrastructure (transport, schools, health services) improves around the property.
Diversifying Between Residential and Commercial
– Considering the importance of the local economic fabric, it may be relevant to allocate part of the capital between:
– one or two rental apartments in the most in-demand neighborhoods,
– a small neighborhood commercial space in an under-equipped area (new subdivisions, densifying zones),
– possibly a warehouse or small logistics unit in the northern or southern industrial parks, if one is prepared to manage more technical leases and different economic cycles.
Gross yields on commercial real estate can be higher than those in other sectors, but this opportunity comes with specific risks to consider carefully. These risks include potentially longer vacancy periods between tenants, the need for adaptation or refurbishment work with each tenant change, and greater sensitivity to economic cycles, which can affect demand and tenant companies’ solvency.
Consider Financing and Taxation from the Start
– Finally, regardless of the scenario, the following elements deserve upfront integration:
– realistic LTV levels for a non-resident (often max. 60–70%),
– impact of acquisition costs (10–14%),
– applicable tax regime (resident or non-resident, EU or not),
– rules for a potential resale (capital gains, municipal plusvalía, 3% withholding),
– potential strategy of grouping several properties within a structure (company) to optimize management and transfer.
A Dense Professional Ecosystem for Support
San Sebastián de los Reyes has a very dense network of real estate agencies and brokers, whether national franchises or local agencies. Agencies like House Hunting, Inmopro, Metrópoli Real Estate, Inmobiliaria Primer Nivel, or boutiques specializing in home staging and high-end properties affirm strong expertise in the sector and display high customer ratings.
This network is an asset for the investor unfamiliar with the area: these professionals understand intra-neighborhood price differences, know where rents are rising fastest, and can help secure transactions (inspections, negotiation, notary/bank coordination).
—
San Sebastián de los Reyes offers a real estate market more affordable in price than Madrid, but very tight for rentals. Gross yields there rival the national average, supported by a strong regional economy and significant public investment.
For a French-speaking investor seeking a compromise between security, yield, and appreciation potential, the municipality deserves close examination. The real challenge is not whether to invest in San Sebastián de los Reyes, but rather where, how, and with what time horizon, fully leveraging a market that, for now, continues to rise on real rather than speculative fundamentals.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
