Madrid: how the capital of Spain became the ‘Miami of Europe’

Madrid: how the capital of Spain became the ‘Miami of Europe’
Madrid: how the capital of Spain became the ‘Miami of Europe’
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In recent years, a new profile of Latin American migrants has emerged

Article information
  • author, Guillermo D. Olmo
  • Roll, From BBC News Mundo
  • March 31, 2024

Miami has long been a reference for Latin Americans looking to change countries, especially those with more money and eager for luxury.

But the Florida city, with its beaches and pleasant year-round temperatures, has gained a competitor from the other side of the Atlantic: Madrid, in Spain.

Since the end of the pandemic, the Spanish capital has become a “magnet” for wealthy migrants.

Residents of Madrid have already noticed that it has become more difficult to find a table in restaurants and that rents have increased.

The data shows that this is not just due to tourism. The company Barnes Global Property interviewed people with assets of more than 30 million dollars (around R$150 million) and discovered that Madrid was the fourth most valued city by them.

And the rich South Americans predominate in this interest in Madrid. They are the ones who buy 60% of the luxury properties for sale in the Madrid market, ahead of the British, French and Americans.

Entire buildings in the Salamanca neighborhood, one of the most expensive in Spain and traditionally dominated by the local wealthy classes, were purchased by Mexican and Venezuelan buyers.

There are already Venezuelans who nickname Madrid “Little Caracas”.

And Mexicans have invested more than 700 million euros (R$3.7 billion) in the Spanish real estate market since 2020, the vast majority in Madrid, according to foreign investment data from the Spanish government.

“The attraction of Latin American talent and capital to Madrid is the same as what happened decades ago with Miami. And the time will come when Madrid will overtake the American city”, says the mayor of Madrid, José Luis Martínez-Almeida, to the BBC News Mundo, BBC Spanish service.

But the phenomenon also generates problems, such as rising rent prices, which ends up expelling many Madrid residents away from the city center and their traditional neighborhoods.

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Madrid has always been a preferred destination for migrants from Latin America

What’s happening in Madrid?

The capital of Spain is one of the favorite destinations for Latin American migrants looking for work in a country with the same language as theirs.

The city has long received workers from Peru, Ecuador, Colombia and other nationalities. They work in areas such as caring for the elderly and sick, construction and other sectors that do not always find enough employees from the local workforce.

Spain is the European Union country that receives the most Venezuelan refugees.

But, although migrants continue to arrive in search of jobs and with greater financial difficulties, in recent years a new profile of Latin American migrants has emerged, with more resources.

“Almost all the clients we help to emigrate to Spain are high-income people, who have no need to generate income there”, says Alexandre Rangel, general director of Siespaña, a company specialized in advising foreigners who intend to settle in Spain.

In fact, a few years ago, well-known Latin American billionaires arrived in Spain — such as the Mexican Carlos Slim, who acquired part of the company FCC, a Spanish infrastructure giant; and Venezuelan banker Juan Carlos Escotet, who today controls Abanca, one of the country’s main banks.

But, as Nuria Vilanova, from Ceapi, an association of directors of Ibero-American companies, points out, “now investors are interested in applications in which so much capital is not needed, and many are investing in things such as the acquisition of properties to rent to tourists” .

What made the ancient capital nestled in the dry Castilian plateau so attractive?

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The city has attracted migrants with more money and in search of luxury

‘It’s like being at home’

“Most of those who arrive for the first time [a Madri] They value the quality of life, public services, restaurants that open every day, public transport and, above all, the tranquility of living in a safe country, as in their country they were permanently threatened by crime”, says Rangel.

Spain and its capital also offer the possibility of protecting assets threatened by unexpected government decisions or the monetary turmoil that Latin America is accustomed to in a solid currency like the euro.

But there are also other factors, perhaps more intangible, as explained by Venezuelan Eladio Duque, one of the many clients that Rangel helped to emigrate.

“I lived in Miami for 12 years and I never felt at home; when I arrived in Madrid I felt at home from day one,” he says.

Eladio moved to Miami when Hugo Chávez ruled Venezuela.

He created a decoration company and obtained American citizenship, but in 2022 he fell in love with Madrid.

He now runs his Miami business remotely, from his apartment in the Court area of ​​Madrid.

Credit, Personal archive

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Eladio Duque says he feels ‘at home’ in the city

Madrid is for him “the most wonderful city in the world.”

“Here people don’t look for me for what I have, but for who I am,” he says.

In a few months he will be able to apply for citizenship, a much faster and easier process in Spain than in the United States.

Spanish law allows Ibero-American citizens to apply for nationality after just two years of legal residence in the country — and a residence visa is also easier to obtain than in the United States.

And for those with high purchasing power, there are added facilities such as the 85% reduction in tuition fees at Madrid universities for Ibero-American students, announced at the end of the year by the regional government.

According to Vilanova, “Spain is displacing the United States as the place where the children of Latin American business leaders are raised”, and the differences in the migration policies of the two countries appear as one of the reasons.

Rangel says most of his clients think of Miami first because they have family there or have visited at some point.

“But then they realize that in reality the United States has closed its doors to legal migration.”

For those who want to open a company, this means investing large amounts of money, hiring employees, embarking on projects over which they have no control and waiting years for the process to be resolved.

Credit, Personal archive

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Mexican Carla Chanes moved to Madrid in search of safety

Mexican Carla Chanes says she moved to Madrid because she lived in fear of being a victim of crime in Mexico City.

Although there are crimes such as cell phone and wallet theft — especially in the city center and in popular tourist locations — Madrid is generally considered safe and its crime rate is low.

Carla lives with her family about 30 km from Madrid, in the historic municipality of Alcalá de Henares, known for being the birthplace of Miguel de Cervantes.

His daughter studies at a private school subsidized by the regional government. She pays 40 euros a month (about R$216), much less than she would spend on a private school in Mexico.

Waiting to obtain Spanish nationality, his family survives on savings and renting their house in Mexico.

“Here we realize that it is possible to live while spending less,” she says.

Carla says that the beginning of her stay in Madrid was difficult, but over time, she realized that she was no longer afraid of someone taking her son away while she was walking down the street.

“The peace of mind of living in a safe country is priceless,” he says.

But if Carla feels that she was welcomed in Madrid “with open arms”, some of those who already lived there are beginning to realize that the metropolis is becoming more expensive.

Photo caption,

The city has many bars and squares

Higher and higher rents

Andrés Pradillo, spokesman for the Madrid Tenants Union, says the phenomenon of foreigners buying homes in Madrid is growing disproportionately.

“Rents in the city have increased by 60% since 2015 and many families now have to allocate more than half of their income to housing,” says Pradillo.

More than half of the homes sold in Spain last year were paid for in cash.

This, according to Pradillo, indicates that “these are houses not for housing, but for speculating and obtaining large incomes in areas with very high incomes”.

As a result, “many people in Madrid are disillusioned because they are being driven out of their neighborhoods,” he said.

The idea that authorities should regulate rental prices has gained increasing weight in Spanish politics in recent years. .

The city’s mayor, José Luis Martínez-Almeida Almeida, admits that “as happens in other big cities, Madrid’s biggest problem is housing.”

But he says that “the arrival of people with the capacity to invest is a good opportunity for the city, as long as we know how to face risks, such as the possible increase in inequality”.

The mayor says he will sell public land to developers to build affordable housing.

“In the coming years we will increase the number of homes available for rent in Madrid by 4,000,” he says.

There are new urban developments that promise 10,700 homes with a 60% government subsidy, but it is not yet known whether they will be enough to alleviate the housing deficit.

The article is in Portuguese

Tags: Madrid capital Spain Miami Europe

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