Converting Europe Into Open Air Museum (Real Estate Mania) .:. Late Night Blogging
I suppose that the real estate craziness is happening all around the world, especially in big cities, and famous tourist destinations, but I will try to share views from my perspective... Living in Spain, renting an apartment is enough to "feel the pain" even without participating actively in the real estate market by buying, selling, or renting short term...
Thanks to (or unfortunately... I'm not sure if is it luck or bad luck) having a 3-year rental contract, my landlord can raise my rent only 1 time in 3 years, and she is using that right regularly! My contract will expire this autumn and she has announced that the rent will rise by 20%!!! On the other side, my son will go to University this autumn and we have to rent a ROOM for him in a big city... It's incredible how much money people are asking for only 1 room!
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As I said, the problem with forever-rising real estate prices is present everywhere, but it is obvious in the big cities, where prices are 5-10x higher than in rural areas of the country... I remember well the trend that was present when I went to University... Many teenagers from rural areas were thrilled to "escape" from their village and to NEVER go back... Those migrations are one of the important ones that are creating the pressure on real estate prices...
But, there is another, even bigger issue, particularly in Spain and that's "international tourism"! It's very easy to get hooked in Spain... It is a beautiful country, and whenever you come, to whatever area you go, you can always find something interesting, intriguing, beautiful... From gorgeous beaches all around the Mediterranean Sea, through some oldest cities in the world with preserved architecture, a lot of attraction parks, water parks, etc. All that, for a relatively cheap price, but not for too long...
When people come here for vacation, they fall in love with the country and come back to live here, temporarily for a couple of months in a year, or permanently... Can't judge others as I did exactly the same! But, there is a big difference between being here as a tourist or living here the whole year... I'm not living in a big city, but we do have a lot of wealthy people in town who own 2nd (or 3rd) home here... In some towns, during the winter there is maybe 20% of the population and then, during the summer there are 5 times more people!
You are probably getting slowly where is the problem... Demand is huge, tourists that come here are wealthy and they don't ask for the price... Of course, real estate agents know that and use it to inflate prices even more with "fake offers" on the market... On the other side, salaries in Spain didn't go up at the same pace as the RE market... Many locals are renting (like me) and can't pay for higher prices anymore... Because of that, they are moving more inland, which means longer commute time to the workplace, while some others choose to live in caravans, or even tents during the summer! The quality of life is going down...
Another issue is that the whole surrounding is converting into a place suitable for tourists, which usually means, short-term solutions, junk food restaurants, homes without any "soul", etc. It's impossible to find quality food from farmers, or to have a peaceful place for a picnic, or just to enjoy the beauty of nature...
And where we are at this moment? You have big cities with some great architectural buildings protected by UNESCO, or some other institutions... You have half of the city licensed as tourist accommodation, the other part in the hands of "weekend tourists", and 10-20% of locals living there... We have created "open-air museums" from our cities, trying to preserve them, forgetting that they aren't REAL without the locals, who give them heartbeats, and make them what they were... We created FAKE places, which reminds me of those "fake" Facebook profiles where everyone is happy in every photo, and everyone is an influencer, a successful person, doing nothing, and living a dream...
I don't know what is the solution for over-tourism, but the direction where we are going isn't promising and it doesn't look as sustainable for the long run... What do you think about these issues? Does something similar happen in your country?
Thank you for your time,
~ph~
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I didn't know that in developed countries, citizens are equally exploited as we have in underdeveloped countries like Nigeria. Imagine how real estate owners could increase house rent more than 100% in the last one year
Well, it's the same everywhere... Rich or poor, people are the same... Always greedy and want more! It just depends on how much they can take, but in general, the final goal is to put us all into slavery... :(
Luckily, we have some options, like crypto... where we can opt-out from the corrupted system...
each July the tiny town we live in by the sea explodes 10x. the rest of the year is far more relaxed so locals grin and bear it as the tourist income makes it possible to run locally owned businesses cafes/bars, restaurants, construction trades and even supermarkets and a gas station year round. we have lost the post office, all bank branches and much more due to centralization and lack of year round income. that keeps away the chains also. so folks here tend to be glad to see the tourists come and glad to see them go.
rents are high but that is mostly due to the recently established higher education in town. the most profit is made by unregulated renting to students for ten months and tourists for six weeks. that leaves little available for long-term contracts. long term contracts are annually adjusted for inflation. once every three years they can be raised significntly more if the market has gone way up. which it has consistently for decades. so the percentage of home ownership is very high but the mortgage loans are scary.
In some places, the tourist season is similar to the harvesting season... Everything that you "collect" in that month or two, should last for the rest of the year... Unfortunately, many places in Spain have tourist season throughout the whole year, so there is no time "to relax" 🙂
I suppose that my solution would be to move to a smaller town where there are not that many "attractions" and live more peacefully, and probably less costly... 😃
either that or start a tourist business and get the other businesses together and abuse and suck the tourists dry so they don't come back !LOLZ
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Renting market has gone crazy in my country. There is no limit for yearly increase, it could be %50, %100, %150 and so on due to the hyperinflation.
Owning a house has already been a dream here and I believe that it will last in coming years.
There is a limit here in Spain, but ONLY if you are "under the contract"... But, because of that, nobody wants to offer a longer contract (or infinite) than 3 years... When your contract expires, they can raise whatever they want... 🙁
20% raise? Sounds like she wants to drive you out of the apartment and rent it out to tourists.
The thing is that prices around us are higher than what we pay... So, if we go, she will rent out the apartment for even more than 20% easily... It's not that we don't understand that everything went up, but it does hurt when you have to pay more and you are not earning 20% more than 3 years ago...
That's so true. Anyone who's got a 20% pay rise from 3 years ago is very lucky.
Sound like the rental market has increased a lot all over the world, unfortunate for renters
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You're describing exactly what's going on in Portugal right now!
It looks like it's happening everywhere... It's enough to read the comments on the post from people all around the world...
Btw. I remember that Portugal had some amazingly low RE prices a few years ago (compared to Spain), but it looks like that is changing fast... And prices are going up rapidly at your place too...
Portugal is chaos now, especially in Lisboa area... prices are just insane, and unaffordable to the normal portuguese.
My area there are no long term tourists. The rents are crazy still much more to rent than to pay a mortgage with owning a property. Glad I own and pay a mortgage. I rented for quite some time but could only lock in for one year at a time and almost every year it went up some. The 20% is a crazy increase though. Some buy property to turn around and rent it because there's money opportunity there. I tell you across the street their is a family that rents a house and they pay double what I pay and the layout is basically the same. It's no wonder why there are many rich people in RE.
That ratio has changed through the years... I have been following that during the last 10-15 years and it looks like, at this moment, it is like you said... Lower monthly payments for mortgage than for renting... Waiting for that crypto bull run to buy something and finally get out of this renting craziness!
Oh, man... The owners of RE agencies here have at least 5-10 personal properties... Commissions are crazy high! Not just for buying, but also for renting...
I here you on wanting to buy. I don't know about there but the housing market is high here. The 18 years I've owned my house it has almost doubled in value. Not playing with the RE market now but I have refinanced twice to get a lower interest rate since I bought my home. Super happy where my rate and payment are at now 😁
Don't think I'm kidding you when I write "only 20%, lucky you!".
Serbia is not a real tourist destination, but it faces the same situation you wrote about, the decades-long population migration from the countryside to the big cities.
Especially Belgrade, Novi Sad and Nis.
With an additional burden on RE, which you in Spain probably did not feel. Migration of people from Ukraine and Russia.
Their emigration and search for apartments for rent in Novi Sad and Belgrade, where now at every step I can hear the Ukrainian or Russian language (I don't know how to make a difference, if there is one) was used by the owners of apartments for rent to such an extent that they rented apartments increased by 50%, by 100%...
I can't write about the state of the RE market in my city in this comment, so I'll write a post at some point 🙂
PS. In addition to Spain, Italy also has many tourist attractions, and Rome (the old city center) is literally an open-air museum - we commented on that a few years ago when we were on a tourist trip.
Believe it or not, there was (and probably still is) a similar situation here, where you could buy a whole village for 5-10K EUR in some rural areas of Spain... The government took some measures and offered the RE for young people for a cheap price, but with a commitment to stay there for X years... The problem isn't solved completely, but it looks like we (and other locals) will go to those villages as we will not be able to pay the rent... lol... So, that problem will be solved by another problem... hahahaha 😂
Yeah, a similar problem is in Hungary with migration from war-affected countries... We have people from Russia and Ukraine here in Spain too, but I doubt that they are from the same "class" as those at your place... These here are with BMW, Mercedes, Jeep, and other huge cars... Fit in with wealthy Norwegians and Dutch people...
When you remind me of Rome, I will be that "tourist" as I want to go to visit it... lol... So, we are also part of the problem, too! 😃
Did you hear that because of us, "boring tourists", the authorities of Venice made a decision to charge entry into the city...
As if €5 will turn away someone who came to visit this city 🙂
But well, little by little, they fill the budget in all ways...
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I think it's happening a lot to the tourism places. People are being pushed out further due to the prices and the area in the city rises as people move in or try to build things in the city.
These "city centers" are becoming bigger and bigger, and whenever you go, you see the same thing... Same "brand shops" on main streets and barely residential buildings at all... Nobody lives in the city center and everyone moves out, as for not being able to pay the rent, or because of "tourist pollution"/noise...
You have raised quite a few questions here.
As for studying, it's similar for me. My older son is studying in a big city. We were lucky enough to get him into a dorm where he has a room for €150 a month. If he had to go to a private room, it would be somewhere around €250.
But we live in a small town, let's say medium touristic for Slovenia, there are plenty of rooms available, but they all go through Airb'n'b. And mainly for foreign workers who rent it for extended periods. But there is also a debate here; for example, in the bigger cities, there is a housing shortage, and because it is a left-wing government, they have made it illegal by law to issue rooms on a short-term basis, i.e., through Airbnb or Booking. If that will solve the housing problem, I very much doubt it.
I have a flat, so I do not have to pay rent. My parents and my wife's parents have two old houses, but they need to be maintained, which is a considerable expense. They are not worth selling in a small town, so I don't know what we are going to do with them at the moment—not even enough for a one-bedroom flat in a bigger town.
€150 a month for a dorm is a fair price... We checked that option too, and believe it or not, dorms are here from 450EUR and up!! It is literally cheaper to rent a room in a private apartment than to rent a room in a dorm... Have no idea why and how it works, but that's insane!
Here in Spain, if you want to rent out your apartment, you have to get a tourist license to do so... In some way, that's not bad as some municipalities can STOP issuing these licenses and slow down tourist invasion... That happened to a town that is near my place, and RE prices began to go down slowly... So, maybe that could at least slow down the uptrend... Anyway, renting to students doesn't comply with that law, so they are "spared" from that... But, prices are still high... 😒
I think that these, "peaceful", rural, small towns will be appreciated more in the future as more and more people will realize that the quality of living is better... It happens here, where we do live in a small town, and a lot of retired people from Norway and the Netherlands are coming to retire here... To enjoy good weather, a slower pace of living, etc.
We will see what happens...
It's crazy that happens all over the world. Owners will always seek to get the most out of it. Now that benefit is in tourism and they will squeeze it until you can't get more. That day will come sooner or later, what I fear is that it is not a gradual process of converting the economy into something viable and sustainable.
The pandemic showed how fragile this tourism-dependent system is. I thought it would be reduced but instead it has multiplied.
Ps- One of the happiest days for me was the one I paid my last mortgage receipt for my house.
It is definitely out of control for some time... It looks like we are rushing into another RE bubble that will imminently happen... It's just a question of when...
I hope I will live that day too... The first step is to get a mortgage and not throw money through the window by paying rent to someone else...
Spain is indeed a beautiful country, I've seen clips and pictures, and I feel that these landlords are taking advantage of the fact that it's a hot zone to change the price of the rent however they seem fit. Nevertheless, 20% is a huge increment even if it only happens once in 3 years.
Congratulations to your son, even if I know going to university incurs more expenses
Thanks! It is an additional expense, but we will find a way to do it... Step by step... The most important is that he gets the opportunity for growth... After that, it's on him to use it or not...
Yeah, you're right, I feel that as parent, the best thing to do for our kids is to put them i better positions to compete
The real estate investors are really making much money these days. In my country rent is really unbearable.
Not just investors, but also RE agencies are having some huge commissions and profits on ordinary citizens... 😒
The 20% increment is too much. It’s extreme. Even if she wants you to do that, she could have started with 5% at first…
Now, a lot of people don’t build houses for people to live there anymore. It is called serviced apartments where tourists will be the ones staying in the house for a few days with a much more higher price
Yeah, it looks like the attention went into the "tourist sector" and all new builds are going in that direction... Creating even more problems for locals and "ordinary" folks...
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I feel your pain brother. Rent hikes are tough, especially with university costs. Tourism's impact on housing is a real struggle here too. I'm not in Spain but this is really happening everywhere indeed
After reading others' comments, I'm even more sure that it is happening everywhere... Somewhere on a slower pace, somewhere faster...
Yes absolutely brother, this is really all over the world now
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