Winter of 2022 started with a bang!
Yippee! We’re so happy to announce that Madrid’s travel sector has continued to thrive in the winter of 2022 despite the 5th and 6th waves of COVID and the ensuing travel restrictions. Tourism not only survived but also stood as a pillar of strength for Spain and the Spanish economy.
According to an Epdata study, 247,982 international tourists arrived in Madrid up to January 2022, which represents an increase of 444.31% compared to the same period of the previous year. We spoke with one of our collaborators V. Roa about this unprecedented surge. According to them, “Despite the political and economic uncertainties seen globally, Madrid is a leading international city. A large number of investors want to invest in the city because it provides them with steady profitability.” They also say that, ” Despite maintaining our focus on the tourism business, we are still betting on temporary apartments. Many post-pandemic tourists seem to prefer longer stays in stark contrast to the traditional tourism model where people stayed for less than a week in one place. This is proof that it’s time to rethink our tourism model. Moreover, we want to continue collaborating with Homelike as a pioneer platform of temporary rental apartments.”
The COVID-19 pandemic has brought about an accelerated shift in work policies. Digital nomads are on the rise as the world opens up once again. Many companies are not only tolerating but also encouraging people to work from home by adopting technology and implementing great flexible work policies. Companies no longer care whether you work from a coffee shop, a library or even a beach as long as you get the work done. This is creating a generation of location-independent, tech-savvy workers who are free to work from any location of their choice. This transition to remote work is highly advantageous for Madrid as it is one of the most preferred digital nomad destinations in the world.
If you’re considering a relocation, remember that moving to a new country and starting a new life is a ginormous step. You may find yourself tempted to just buy a new property and begin your new adventure straight away. However, if you pause for a moment and think about it, you’ll realize that it’s not a sensible thing to do.
Living in a new place always involves a rather steep learning curve. So, instead of jumping headfirst into an ill-conceived property purchase in your new country, it would be wiser to rent a property in a city of your choosing to understand all the quirks of living there.
Revenue has doubled YOY
Due to this growth in demand, especially in the last four months of the year 2021, prices of mid term rentals have also increased considerably. For example, apartments of 50-70m² have increased by an average of over 40% from €1,200 to €1,800 in Madrid city. Currently the price per m² in Madrid ranges from €16/m² to €22/m² in the most central areas. This has led to double the investment in a single year, making Madrid a leading investment city in Europe.
Digital nomads are location-independent professionals who generally travel alone or with a companion. They don’t look for the largest apartments but apartments with an average of 50m²-60m² where they feel comfortable. The most in-demand apartments are those that are fully renovated and furnished, adapted to temporary living, giving comforts to the guest such as wifi included, kitchenware, bed sheets, towels, washing machine and kitchen equipped with appliances.
It is important to have these details present so that the guest can feel at home. On an average, our digital nomad clients stay from 2 to 6 months, and if they like the experience they are free to extend their stay by up to 11 months more. Today, moving from country to country and city to city is becoming the norm rather than the exception. About 20% of tourists in Madrid come for work reasons and almost 5% of them stay permanently
Coliving facilities are booming!
A big new player has entered the real estate market this year is the co-living segment. It will get more professionalized with big European players aiming for ambitious projects (Dovevivo, Habyt, or Colonies). They’re all set to impose new standards of quality, lower the current prices of flat-sharing and increase their overall supply, thereby creating real competitiveness in this segment.
Colivings are starting to take off strongly in all Spanish cities, especially Madrid. There is a large concentration of colivings giving rise to rooms not only for students but also for workers. Currently sharing an apartment, house or building for a period of time is part of our new modus vivendi, the era of shared economy, lower prices and providing places to live for everybody. Actually, we are also observing changes in Public Administrations granting permits for the creation of colivings buildings.
Last but not least, in Madrid, there are many coliving facilities focused exclusively on students. The big difference between a student and a digital nomad is that the student usually comes for a whole year or semester. Therefore they have a minimum term of 4 months.
How does 2022 look for Madrid?
Despite all the uncertainties that are being seen globally due to COVID and political conflicts, the future of temporary rentals in Madrid seems to be promising. More and more companies are joining the temporary rental business, instead of day-to-day renting thanks to:
- Companies allowing employees to work remotely
- Projects that were kicked off owing to widespread vaccination
- Europe fostering corporate demand
- Students coming back to universities
- Open borders in America/Asia
The price forecast will remain stable or even decrease a little in summer. And the volume of demand for apartments and rooms will continue to increase thanks to Homelike’s growth and expansion plans in the coming months.
According to a report by Idealista, in the neighborhoods of Malasaña, Checa, Huertas, Sol, Lavapies and Palacio, the average price during the month of July was 16.3 €/m2 and this last February has risen to an average of 18.3 €/m2 . From summer to winter they have risen by 11%. In summer this percentage is expected to go down but not to the same prices as last year. Indeed, this could be a good strategy to attract demand and make sure that the apartments are rented and generate a steady revenue.