The Madrid skyline visible between trees
neighbourhood guide

Where to stay in Madrid

Madrid has been described as the most Spanish of Spanish cities, and once you visit, you'll see exactly why. The city is a vast urban metropolis home to a huge international population as well as Spaniards from all four corners of Spain. Because of this, the cultural centre of Madrid is a melting pot of Spanish identity.

The sprawling capital is overflowing with history and culture with tons to do and see. It’s also a bustling hub for foodies - especially lovers of tapas - and features some of the best local cuisines in the country.

One thing to note is that this city is massive, and there are different neighbourhoods that cater to different personalities and interests. Lavapiés and Argüelles are trendy areas suitable for budget travellers, while Paseo del Prado is the better option for families after a bit of peace and quiet. There's also the tapas centre of La Latina and the buzzing local neighbourhood of Malasaña, which are certainly worth checking out!

In this article, I’ll break down the best neighbourhoods to stay in in Madrid so that you can make a more informed decision about what's best for you.

The Plaza de Cibeles and the Madrid City Hall at dusk

At a glance

  • Best for first-timers: Puerta del Sol in the centre of the city close to major attractions.
  • Best for couples: Retiro for quiet streets, good restaurants and a beautiful park.
  • Best for families: Paseo del Prado with wide pavements and spacious accommodation close to parks and cultural sites.
  • Best for foodies: La Latina for easy access to tapas bars, restaurants and markets.
  • Best on a budget: Lavapiés or Argüelles with affordable accommodation walking distance to major attractions.
  • Best for a local experience: Malasaña for trendy restaurants, boutique shops and good nightlife.

Best area to stay in Madrid for first-time visitors

Puerta del Sol

People visiting the famous Plaza Puerta del Sol in Madrid on a sunny day

Sol is the heart and soul of Madrid. Located right in the centre of the city and populated by more tourists than locals, this suburb wouldn't be ideal to live in, yet can't be missed if you're visiting the city for the first time.

If you're familiar with any place in Madrid, it would be the iconic Puerta del Sol, one of the city's most gorgeous squares and popular draws. In fact, this square is the historical centre of the entire country, with ancient roads starting here and leading all over Spain.

Naturally, the area surrounding this emblematic central square is packed with restaurants, bars, museums, theatres, and shops to explore. It's a walkable area, and you could spend weeks exploring the back streets here and still find new places to eat every day.

You’ll get to wander past the famous Oso y el Madroño statue of a bear climbing a strawberry tree in the Puerto del Sol square, which is the national symbol of Madrid. Arguably even more picturesque than this central square, stroll through the Plaza Mayor with its gorgeous Casa de la Panaderia and grab a bite to eat at one of the local tapas bars.

As the most popular touristic area in the city, prices tend to be on the higher side in Sol - you’ll be paying to be in the middle of the action here. Because of this, I would recommend this area for short stays or perhaps even splitting your stay between Sol and a quieter neighbourhood.

Stay at Petit Palace Plaza del Carmen if you want to be right in the heart of the action.

Best area to stay in Madrid for couples

Retiro

Green trees and quiet pathways in  El Retiro Park, Madrid

Located just east of the city centre, Retiro is a quiet residential neighbourhood on the eastern side of the park that is perfect for couples. While you won't have to deal with the intense tourist crowds and traffic in the centre, you'll still be near enough to the city’s main attractions, shops and restaurants.

Retiro is an upmarket residential area that many local families call home. The area gets its name from the famous El Retiro Park, which is the biggest and most beautiful park in Madrid. Here, you can enjoy a peaceful stroll through the rose garden, a siesta on the lawns in front of the Glass Palace or take a leisurely paddle across the lake.

If you're an active couple, there are many free activities to join in the park, including yoga lessons, roller skating, running clubs and boot camps. Some of the best restaurants in the city can be found bordering the park, and you'll find every type of international cuisine in this area, from local tapas to world-class vegan eateries.

Stay at the exclusive Petit Palace Lealtad Plaza for a romantic getaway,

Best area to stay in Madrid for families with young kids

Paseo del Prado

Benches on the tree-lined Paseo del Prado in Madrid, Spain

Paseo del Prado is a famous street nestled between El Retiro Park and the city centre. This tree-lined boulevard is home to some of Madrid's most important cultural sites, including the iconic Prado Museum and The Royal Botanical Garden.

The accommodation around this area is spacious, quiet and more residential than in the centre, yet still close enough to the action not to have to spend hours on public transport.

This area has a ton of green space, the most notable being El Retiro Park and The Royal Botanical Garden. El Retiro Park is overflowing with lush lawns where kids can run free and get some fresh air. There is also a central lake where you can enjoy a paddle boat ride with your family before settling down for a meal at one of the park's outdoor restaurants.

No matter when or why you visit, the Prado Museum should occupy a spot on your itinerary. The museum is over 200 years old, and houses work from Ribera, Goya and Murillo. Not only will it blow adults away with its historical collections, but it's also an excellent activity for kids, offering child-friendly tours.

Stay in a family room in the Atocha Hotel Madrid, Tapestry Collection by Hilton and enjoy a bit of extra space when travelling with children.

Best area to stay in Madrid for foodies

La Latina

Outdoor dining and colourful buildings in La Latina, Madrid

As the cultural centre of Spanish cuisine, Madrid is one of the country's best places to enjoy traditional tapas. La Latina, located southwest of the city centre, is the oldest quarter in the city and beautifully showcases the unique medieval past of Madrid. It’s an easily walkable neighbourhood and is only a short stroll from ​​Gran Vía (Madrid's most famous shopping street).

Stroll through the wide public squares and narrow cobblestone streets, and you'll find an abundance of tapas restaurants, from trendy hole-in-the-walls to classy sit-down restaurants.

Among them, Cava Baja street is home to some of Madrid's oldest restaurants and bars, where notable priests and artisans once wined and dined. Cava Baja is the place to be on a Sunday afternoon, when locals, ex-pats and tourists bar hop along the bars and restaurants that line the street.

Before you head to the bars on a Sunday, make a stop at the El Rastro flea market, Madrid's oldest and biggest weekly market. Mercado de la Cebada is another excellent food market offering a wide selection of authentic tapas made using local ingredients. Every Saturday at noon, this market turns into a bustling seafood hub, with fishmongers selling fresh fish dishes for an affordable price.

Aside from the rich food heritage, this suburb is also home to the Basilica de San Francisco El Grande, which houses some of Spain's most priceless artwork.

Stay at the Welcomer Apartments La Latina which is perfectly positioned between the heart of La Latina and the Plaza Mayor.

Best area to stay in Madrid on a budget

Lavapiés or Argüelles

A flea market along a street in Lavapiés, Madrid

Argüelles is nestled between Western Park and Malasaña, bordering the gardens of the Palacio Real de Madrid. Madrid's biggest university, Complutense Madrid, is located in the centre of this suburb, which brings a wealth of youthfulness into the neighbourhood.

This neighbourhood is pretty big yet still walkable if you prefer to explore the city on foot. It's only a short walk (between ten and twenty minutes depending on where you are) from Sol and the Plaza Mayor, making it a great option for first-time visitors on a tight budget.

Another excellent area for budget travellers, Lavapiés is located in the southern part of the city and has for long been home to a significant portion of the city's international population. Lavapiés embraces its diverse culture and is an up-and-coming area with an edgy and rugged feel. This area is especially well known for its hipster nightlife and incredible Indian restaurants.

One of the main reasons Lavapiés trumps the other neighbourhoods for its price is because it is home to a range of hostels and homestays which offer incredible value for money.

Stay at The Central House Lavapiés for modern, affordable accommodation.

Best area to stay in Madrid for living like a local

Malasaña

People eating outside on a sunny day in Malasaña, Madrid

Any local will attest to the fact that the Malasaña neighbourhood is the trendiest part of town. Its main square, Plaza de Dos de Mayo, was the site of the 1802 battle against Napolian and is now overflowing with hip bars, lively terraces and restaurants. Later in the 1970s, Malasaña was home to the La Movida Madrileña movement, which contributed to the fall of Franco’s dictatorship.

With remnants of history throughout the architecture and street art, Malasaña is now a happening neighbourhood home to trendy restaurants, vintage shops, boutique stores and tattoo parlours. It’s located north of the city centre, with easy access via the metro, and is bustling with life at all hours.

Conveniently, it's also much more affordable than the higher-end areas, making Malasaña a great location to meet friends, socialise, or just people-watch. Unsurprisingly, this is a relatively young suburb packed with students and young adults, making it ideal for those who enjoy a vibrant social life.

Stay at Arizonica Suites for comfortable apartments in a central location.

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Roxanne de Bruyn

Author - Roxanne de Bruyn

Roxanne is the founder and editor of Faraway Worlds. She is a freelance writer and guidebook author and has written for several travel publications, including Lonely Planet and The Culture Trip. With a background in communications, she has studied ancient history, comparative religion and international development, and has a particular interest in sustainable tourism.

Originally from South Africa, Roxanne has travelled widely and loves learning the stories of the places she visits. She enjoys cooking, dance and yoga, and usually travels with her husband and young son. She is based in New Zealand.

Last Updated 25 August 2022

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