Madrid to Mexico City, buying apartments in our time Airbnb
MADRID – As a freelance writer with no fixed salary, I am rather desperate to buy a studio, something to help me ground myself in these turbulent times and provide at least some financial security.
So far my research has focused on two locations: Mexico City and Madrid. The former has a well-established reputation for affordability, the latter is just emerging from a major housing crisis. Anyway, I told myself that I was bound to find something. Unfortunately, I ran into a big new factor in the real estate market: Airbnb and its ilk.
In early 2016, I visited several 30 square meter apartments in the historic center of Mexico City, near the famous Zócalo Square. The asking price, in each case, was the equivalent of around 100,000 euros. Truth be told, that’s about what I can share. Still, this is not a trivial amount. And if I had to spend that amount of money, I wish my new digs were more than a dismal dumping ground.
But while that might be an entirely reasonable expectation, it turns out it’s not very realistic. Seeing multiple units for sale in the same building that day, my morale slumped as I wished the prices had. The apartments were dark rectangular spaces with inexpensive amenities and no street views. In addition, the sleeping areas were located about two meters from the neighbor’s front door.
I was realizing that neat, bright little apartments are a rare breed these days. And the few that are available are worth their weight in gold. Why? Due to their short term rental potential.
Pity. The building I had visited was a restored 1930s gem, with a beautiful elevator, nice handrails and doorknobs, and even a waste disposal protocol (a triumph in Mexico!). I was tempted.
The real estate agent followed up a few days later with a phone call. “What did you think of our apartments? ” she asked. I said I had to rearrange the decor and tear up the linoleum floor, so I could pay around 80,000 euros for the nicest one she showed me, which had a partial view of a church dome outside. I also told him that they should remove the white leather and chrome furniture sold with the apartment, as I was not planning on opening a brothel. No sales there.
Mexico City has long been one of the world’s most affordable and great big cities to live in. But in recent years, real estate prices have skyrocketed, in part due to a booming urban economy and an increasingly accessible loan market, but also because of the surge. the power of online rentals, which has prompted many people to invest money in real estate. A report from early 2016 estimated house prices had risen to about seven times the national rate over the past five to six years.
Across the Atlantic, selling and rental prices are on the rise again.
The trend shows no signs of slowing down. A recent online review I saw touted tiny apartments (15-24 square meters) inside a 19th-century mansion being restored on Gabino Barreda, also in the city center. The project involves a concept of co-living which includes spaces for co-working and shared entertainment. Tellingly, the review also called the apartments “perfect for Airbnb.”
Across the Atlantic, in Madrid and Barcelona, sale and rental prices are once again rising well above the heads of ordinary people after several years of recession that have led debtor families to be driven from their homes, often in front of the television cameras. A small studio in Madrid’s Lavapiés district, a multicultural and shabby-chic district on the way to becoming a trendy hipster and gay-friendly district, now exceeds 120,000 euros.
Lavapiés district in Madrid – Image: Nicolas vigier
“Foreign investors are taking it all,” a real estate agent recently told me. “Don’t expect to find anything (in the city center) for less than 150,000 euros.” It’s probably not fair, but the image that keeps popping up in my head is of a blonde haired shopper wearing a synthetic anorak and asking prepared questions.
The agent said prices were rising more slowly in Barcelona as the city began to restrict online rentals. Perhaps as a prelude to similar movements, I read last week at El País than Madrid may also restrict and tax these rentals.
In Valencia, on the Mediterranean coast, we frequently see sheets hanging conspicuously from balconies, especially in the historic district. Neighbors use the leaves to inform transit authorities of “illegal” rentals inside the building. It’s the residential equivalent of taxi drivers trying to smash Uber cars.
It all seems to fit in with the hectic and speculative nature of life in this era of freelance jobs, financial crises, mixed election results and wacky referendums. A studio was meant to be a sort of shield against all of this, a sort of “home bank account”. Now I can find myself away from that too.