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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