How does it affect the fact that it has become the capital of the rich Latin Americans?

How does it affect the fact that it has become the capital of the rich Latin Americans?

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In 2013, in an attempt to turn around the economic crisis, Mariano Rajoy promoted the Law to Support Entrepreneurs and its Internationalization where the calls appear golden visa. It’s about a Immediate residence visa that is granted to those who spend on furniture or real estate in our country. These golden visas have generated the arrival of countless Latin American investors who have exchanged the beaches of Miami for the skies of Madrid and have contributed to the local economy. Its arrival, however, in addition to the inflationary crisis, has in turn brought “consequences” that have directly affected ordinary Madrid residents and the rental price of their homes.

For a long time the city of Miami was considered the ideal place to live. Its paradisiacal beaches and pleasant temperatures throughout the year attracted thousands of people, mainly rich people and Latin American investors who were looking for a paradise to do business and to be surrounded by luxury. This postcard received a competition that is gaining more strength every day. We talk about Madrid and the opportunities that the golden visa provides for investmentalthough it has brought “consequences.”

A few months ago we counted the Lisbon casewhere a rent triples the country’s minimum wage. In addition to inflation, part of this scenario was also due to the golden visa. For this reason, the Portuguese government put an end to this immigration “benefit” and short-term rental permits, in addition to limiting rent increases to 2%.

“Often, golden visa recipients remodel a home, but do not occupy it. Many times those properties are sold over and over again, and that creates a distortion in the real estate market and it is one of the causes of the housing crisis,” geographer and housing researcher, Luís Mendes, told the BBC.

With the end of the golden visa in Portugal, the eyes of foreign investors were fully focused on Spain where Rajoy’s measure is still in force. Thus, since the end of the pandemic, Madrid has become one of the most attractive cities in the world for those rich Latin Americans who were looking new investment horizons.

The rich Latin Americans bet on Madrid

And the data collected by BBC affirm this scenario. “When the New York firm Barnes Global Property surveyed people with more than $30 million in assets to prepare its annual report, Madrid was the fourth most valued city in the world,” explains a publication from the British media.

In this survey, Latin American investors predominate in the growing interest of the global rich in Madrid. They are the ones who They buy 60% of the luxury properties for sale in the Madrid marketahead of the British, French and Americans.

Along these lines, entire buildings in the Madrid neighborhood of Salamanca, one of the most expensive in Spain, have been acquired by Mexican and Venezuelan buyers, says the article. They have even renamed it “Little Caracas.”

For their part, according to official data, Mexicans have invested more than 700 million euros in the Spanish real estate market since 2020, the vast majority in Madrid.

“The attraction of Latin American talent and capital to Madrid is the same as what occurred decades ago to Miami, but that has been balanced, and the time will come when Miami will wonder why Madrid is looking at us in the rearview mirror,” he stated. José Luis Martínez-Almeidamayor of the Spanish capital, to the BBC.

The “problem” that affects Madrid residents

Foreign investment in Madrid, however, poses direct problems for its citizens. The rise in rental prices in the Spanish capital means that many have to look for alternatives far from the city center and its traditional neighborhoods. According to figures provided to BBC Mundo by Andrés Pradillo, spokesperson for the Madrid Tenants Union, They have risen 60% since 2015. A phenomenon similar to what has been experienced in Lisbon.

In this context, according to a report from this newspaperin Madrid the average income said goodbye to 2023 in 17.9 euros/m2 per month, which represents an annual increase of 13.6%. It is notable that all districts of the capital reached levels never seen before.

Above the city average are the districts of Salamanca (22.5 euros/m2), Center (22.1 euros/m2) and Chamberí (21.9 euros/m2). They are also joined by Chamartín and Retiro (both with 19.2 euros/m2) and Tetuán (18.5 euros/m2).

The profiles of Latin American migration

Spain has been the gateway to Europe for Latin American migration. The absence of a language barrier has caused thousands of people to consider the possibility of living in cities like Madrid. AND the profile of migrants has grown over time: people in asylum situations, refugees, workers, workers, students and rich businessmen and investors like the Mexican Carlos Slimwho acquired FCC, or the Venezuelan banker Juan Carlos Escotet, who today controls Abanca.

However, of these investor profiles, the trend in recent years has pointed towards “family projects” that do not require high capital. “Many are investing in things like the purchase of real estate for tourist rental,” Nuria Vilanova, from Ceapi, an association of directors of Ibero-American companies, explained to the media.

Other benefits

But it’s not just the golden visa that works in your favor. Spain allows Ibero-American citizens to apply for nationality after only two years of legal residence in the country. Facilities are added such as reduces tuition fees by 85% at public universities Madrid for Ibero-American students.

According to Vilanova, “Spain is displacing the United States as the place where “form the children of Latin American business leaders”and the differences in the immigration policy of both countries appear as one of the reasons.

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