Madrid has returned to the list of the world’s 20 cities with the highest quality of life, according to the latest ranking by the Deutsche Bank Research Institute. The Spanish capital now ranks 18th globally, ahead of Paris, London, and New York.
This marks a climb of 15 positions compared with 2019, though it sits two places lower than last year.
Why Madrid has strengthened its position
The institute’s “Mapping the World’s Prices 2026” report attributes the improvement to safety, infrastructure, mobility, the quality of urban services, higher salary levels, and the city’s growing international appeal.
Barcelona, ranked 42nd, also maintains a strong position among Europe’s major cities, benefiting from its quality of life, economic momentum, and ability to attract talent and investment.
Over the past decade, both Madrid and Barcelona have reinforced their international image as attractive places to live and work.
The main challenge is housing affordability
The report notes that the main challenge for both cities is the rising cost of housing.
In Madrid, the average net salary is €2,200 per month, 45% higher than ten years ago. Over the same period, housing prices have risen by 94%, reaching €8,013 per square metre.
Rent for a three-bedroom apartment has also climbed significantly, increasing by 77% in the past decade to an average of €2,493 per month.
Despite this trend, Madrid remains competitive in terms of disposable income after rent. On average, this figure stands at €1,908 per month, placing the city 40th worldwide by that indicator.
Quality of life and housing access will shape future competition
The study concludes that Madrid and Barcelona have become more visible internationally as centres for living, working, investment, and entrepreneurship.
However, housing affordability has become one of the main factors that will determine their future competitiveness in attracting talent, investment, and business activity.
For buyers considering property in Spain, these figures confirm sustained interest in major cities where high-quality urban living is combined with strong housing demand.
Luxembourg ranks first in the world for quality of life for the second consecutive year.
Regarding the cost of living, Zurich and Geneva remain the world’s most expensive cities. Tel Aviv entered the top five, influenced by the strengthening of the shekel and geopolitical tensions in the Middle East.