The rise of international teleworking has also changed the way some foreigners settle in Spain. Professionals who maintain their employment in companies from other countries but decide to live in Madrid, Barcelona, Valencia, or Málaga can access the real estate market with incomes higher than those of a good part of the local workers. The result is an additional pressure on rents that are already facing strong price tension.

The phenomenon is often grouped under an increasingly common word: ‘expat’, abbreviation of expatriate. The term is used to describe people who live outside their country of origin and, in the Spanish context, has become particularly popular to refer to foreign professionals who relocate for work, teleworking, or personal reasons. But behind that label, there are different realities. And that distinction is especially relevant when analyzing its impact on housing.

Sources from the Ministry of Housing and Urban Agenda consulted by DEMÓCRATA differentiate between those who come to Spain to live temporarily and participate in the country’s economic activity and those who use a home primarily as an investment.

“When we talk about expats, we must differentiate between those who come to Spain to live temporarily and participate in the productive life of the country, and those who simply spend a few weeks on vacation and use the home as a financial asset,” these sources point out.

The difference is important because both profiles can have an economic capacity higher than that of local residents, but their relationship with the real estate market is not the same.

A foreign salary for a Spanish rent

One of the elements that explain the pressure these workers can exert is the income gap. A professional who works remotely for a company located in a country with higher salaries can transfer their salary to Spain without necessarily transferring their spending references. In this way, they compete for housing in the same market as a Spanish worker, but with potentially higher purchasing power.

The consequence is especially visible in certain neighborhoods and cities with a high international presence. A home that was previously offered for about 800 euros per month can now be advertised for amounts close to 2,000 euros and quickly find a tenant willing to pay them.

This does not mean that all foreigners arriving in Spain have that level of income or that they are individually responsible for the increase in housing prices. The effect appears when a group with greater purchasing power concentrates in a market with limited supply.

It is precisely this territorial concentration that the Ministry of Housing highlights. “Both groups usually have a purchasing power higher than that of the native inhabitants, so their presence affects the real estate market, especially when they concentrate in certain areas,” emphasize sources from the department of Isabel Rodríguez consulted by this newspaper.

Madrid, Barcelona, Valencia, and Málaga in focus

The phenomenon is particularly visible in large cities and in those destinations that have managed to attract international workers, digital nomads, displaced professionals, and temporary residents.

Barcelona, Madrid, Valencia, and Málaga are among the main examples of this process. In these markets, the arrival of people with salaries linked to richer economies can contribute to increasing competition for certain homes. The problem arises when this increase in demand is not accompanied by an equivalent increase in supply.

The pressure ultimately transfers to the entire market, but it has particularly relevant effects on those who earn their income in Spain. Local workers may find themselves expelled from certain areas, forced to seek housing further away from their workplaces or to dedicate an increasing proportion of their income to rent.

It is one of the faces of gentrification: neighborhoods that transform as residents with greater economic capacity arrive and where prices begin to adjust to that new demand.

From rents to five-euro cafes

The impact does not end in housing. The arrival of international residents with a high income level can also modify the commercial fabric of certain neighborhoods. Businesses oriented towards a public with different consumption habits and spending capacity appear, from specialized establishments to cafes where a coffee can reach five or six euros.

This is not a minor issue. The change in commerce is another of the visible manifestations of the transformation of certain neighborhoods: businesses begin to adapt to the economic profile of those who can afford to live in them.

Housing, however, is where the transformation takes on greater significance because it directly affects the possibility of remaining in the neighborhood.

‘Expat’ or migrant?

The very word ‘expat’ also has a social dimension. In a strict sense, expatriate is simply someone who lives outside their country. There is no legal category that turns a person into an ‘expat’ compared to another who is a ‘migrant’. The difference lies fundamentally in the social use of both terms.

‘Expat’ is usually associated in Spain with foreign professionals, often from other European countries, who move with a job, high income, or for reasons related to lifestyle. ‘Migrant’, on the other hand, is commonly used to describe much broader population movements, including those motivated by the search for employment, economic necessity, or fleeing conflicts.

The distinction can be revealing because the economic situation of those who arrive largely conditions how their presence is perceived.

A foreign worker with a high salary can be presented as an international professional or an ‘expat’, while another foreigner who arrives in search of job opportunities is usually framed under the category of migrant.

In both cases, they are people who live outside their country of origin. What changes is the economic and social context that accompanies each displacement.

Housing: the response posed by the Government

The Ministry of Housing does not propose, at least in the responses conveyed to DEMÓCRATA, a solution specifically based on limiting the arrival of these workers. Its diagnosis focuses on increasing the affordable supply and regulating the different uses of housing.

For those who arrive in Spain to reside temporarily and participate in productive activity, the sources from the department consider it essential to have sufficient public housing.

“The structural solution to prevent them from distorting the market is to have a public housing stock that sets affordable prices regardless of the market,” they explain. They add a second issue: seasonal accommodations.

The Ministry’s concern is that those who arrive for a specific period end up competing for the same residential stock as families who need long-term rentals.

“Seasonal accommodations must be properly regulated so that people who move for a specific period do not crowd out the residential rentals, which are of longer duration, that must be available for families,” the same sources point out.

The department also advocates for temporary measures in areas declared to have a tense market, such as freezing rental prices, as a tool to contribute to stability.

The other ‘expat’: housing as an investment

The Ministry introduces a second category that it considers especially relevant: those who do not actually move to Spain to live and work, but use housing as a financial asset.

In this case, the problem is different. A home that remains empty or is acquired for purely speculative purposes reduces the available supply for those seeking residence.

The Government has already communicated to European institutions, according to the consulted sources, the need to limit purchases and sales for purely speculative purposes by people who do not intend to reside in those homes or rent them out.

“The Government has already raised to European instances the need to limit the buying and selling of homes for purely speculative purposes by people who will never reside in them nor will they rent them out for others to do so,” they elaborate.

The issue brings us back to the same point: the problem is not only who arrives, but what housing they find, for what purpose it is used, and how much supply remains available for those who need to live in it.

A phenomenon within a greater crisis

The ‘expats’ do not explain by themselves the increase in housing prices in the large Spanish cities. Their impact depends on the city, the neighborhood, the type of housing, and, above all, on the relationship between supply and demand.

But their arrival adds a new variable to an already strained market. When a person with income linked to another country competes for housing with someone whose income comes from the Spanish labor market, the difference in purchasing power can tip the scales.

That is why the phenomenon has ceased to be a purely sociological issue. The expansion of international teleworking, the mobility of workers, and the attractiveness of Spanish cities are changing who can afford to live in certain neighborhoods and what types of businesses survive in them.

The discussion, ultimately, should not be reduced to whether ‘expats’ are good or bad for the cities. The question raised by the phenomenon is another: whether the large Spanish cities are capable of attracting talent and international population without expelling from the housing market those who already live and work in them.