MADRID — As a freelancer without a fixed salary, I'm rather desperate to buy a studio apartment, something to help ground me in these turbulent times and provide at least some measure of financial security.
So far my search has focused on two places: Mexico City and Madrid. The former has a well-established reputation for affordability, the latter is just emerging from a major housing crisis. Either way, I figured, I'm bound to find something. Unfortunately, though, I've bumped up against 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 about 100,000 euros. Truth be told, that's just about what I can fork over. Still, that's no trifling sum. And if I were to spend that amount of money, I'd like my new digs to be more than a dismal dump.
But while that may be an entirely reasonable expectation, it's not, as it turns out, a very realistic one. As I viewed several units on sale in the same building that day, my spirits sank as I wish prices would have done. The apartments were darkish, rectangular spaces with cheap fittings and no street view. Also, the sleeping areas were positioned about two meters from the neighbor's front door.
Neat, bright little flats, I was coming to realize, are a rare breed these days. And the few that are available are worth their weight in gold. Why? Because of their potential as short term rentals.
Too bad. The building I'd visited was a restored 1930s gem, with a nice elevator, beautiful handrails and door knobs, and even a protocol for trash disposal (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 flats?" she asked. I said I'd have to rearrange the decor and rip up the linoleum flooring, so could pay about 80,000 euros for the nicest of the ones she showed me, which had partial views of a church dome outside. I also told her they'd have to remove the white leather and chrome furniture being sold with the flat, as I had no intention of opening a brothel. No sale there.
Mexico City has long been one of the world's more affordable large and liveable cities. But in the past several years, property prices have soared, in part because of a booming urban economy and increasingly accessible loans market, but also because of the rise of online rentals, which has prompted many to pump cash into property. A report from early 2016 estimated house prices to have risen at about seven times the nationwide rate over the past five to six years.
Across the Atlantic, sales and rental prices are rising again.
The trend shows no signs of slowing down. One online notice I saw recently touted tiny flats (from 15 to 24-square meters) inside a 19th-century mansion that is being restored on Gabino Barreda, also in the city center. The project involves a co-living concept that includes co-working and shared-entertainment spaces. Tellingly, the notice also plugged the flats as "perfect for Airbnb."
Across the Atlantic, in Madrid and Barcelona, sales and rental prices are again rising far above the heads of ordinary folk after several years of recession that led debtor families to be thrown out of their homes, often before television cameras. A small studio in Madrid's Lavapies district, a multicultural, shabby-chic neighborhood on its way to becoming a trendy hipster and gay-friendly district, now exceeds 120,000 euros.
Lavapies neighborhood in Madrid — Photo: Nicolas Vigier
"Foreign investors are snapping everything up," a real estate agent told me recently. "Don't expect to find anything (in the city center) under 150,000 euros." It's probably not fair, but the image that keeps popping into my head is of a blond-haired buyer wearing synthetic anorak and asking prepared questions.
The agent said prices were rising more slowly in Barcelona as the city begins restricting online rentals. Perhaps as a prelude to similar moves, I read last week in El País that Madrid may also restrict and tax these rentals.
In Valencia, on the Mediterranean coast, one frequently sees sheets hanging conspicuously from balconies, especially in the historic quarter. Neighbors use the sheets to inform passing authorities of "illegal" rentals inside the building. It's the residential equivalent of taxi drivers trying to smash Uber cars.
It all seems to chime with the restless, speculative nature of life in this era of freelance jobs, financial crises, barmy election results and cockamamy referendums. A studio apartment was supposed to be something of a shield against all of that, a kind of "live-in bank account." Now I may find myself shut out of that too.