High House Rental Prices Scaring Digital Nomads Away from Madeira

High House Rental Prices Scaring Digital Nomads Away from Madeira - headline in the Diario

With a rather dramatic photo on the front page this morning, the Diario reports on the consequences of a rapidly evolving economy in the archipelago. Those responsible for the ‘Madeira Friends’ project warn that digital nomads are beginning to be affected by the high prices charged in the house rental market in Madeira. According to the Diario, the situation is scaring off those interested, with there being situations where rents double from one month to the next, thus the headline: “Crazy prices” when renting houses scare them away”

As one of the very first “digital nomads” on the island (before the phrase was ever invented!) I must contest this claim. My understanding is that in order to qualify for residency, “nomads” must prove a certain (fairly high) level of income in the first instance. The problem is that a lot of them arrive with expectations of a quality apartment in central Funchal, thus creating a distorted market where virtually nobody can compete.

If the next wave of digital nomads were to “cut their cloth” and look at other cheaper areas on the island then they can still find more than adequate reasonably-priced accommodation. They may have to look further than Ribeira Brava, where they have created a successful community which in itself distorts the local housing market.

Another piece of news highlighted on the front page reveals that public works gained momentum in January. Contracts for works represented 43% of the entire contractual value in the first month of the year. There were €10.1m in 28 public sector awards in Madeira.

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22 thoughts on “High House Rental Prices Scaring Digital Nomads Away from Madeira”

  1. They are the ones that started the increase anyway ….then those that rented just like those in government..got more and more greedy

    Good riddance to them

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  2. Such negative comments, frankly a few Nomads dont meaningfully raise rents, forighners in general and Real Estate agents hype raise rents.

    Do you ever concider what benefit Digital Nomads may have bought to Madeira and how they may have helped Madeiran’s. Perhaps you could share with us how you have benefited Madeira and the Madeiran people.

    I have had the opportunity to spend time with a number of so called Digital Nomads and have found them to be polite, well travelled, intelligent, interested in people and places, well qualified and experienced in a wide range of relivant now and future industries. Financially independant they share their self-made income with local businesses and are often willing to share their knowledge and experience with others for no benefit.

    They come from many countries, often speak several languages and whilst most are young there are also many mature Digital Nomads some in their late 60’s and 70’s.

    Traveling the world whilst working should be encouraged not looked down upon. In my experience, Digital Nomads are good people.

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  3. We are one of those who come to the island for 6-9 months. For the last 3 years we have been shocked by rental prices. Moreover, price and quality are not compatible. This year, the idea of looking in another country is increasingly emerging.

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  4. The only people benefiting from this are the greedy property agents and the greedy property owners. Foreign money, if managed correctly can be very beneficial to the economy in Madeira and Portugal in general. I came here with the intention of giving back. I wanted to open a small manufacturing operation here and employ some locals on good wages at UK levels but corruption and greed means I am now looking at going somewhere else. I earn good money but I still don’t want to be ripped of by grubby money grabbing swine.

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    • Agents don’t have control over property prices. It’s the owners, especially those foreigners who snag properties and flip them for crazy profits, making it tough for locals.Probably someone like you that cannot take advantage of the locals like you would like too.

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    • Hobbes
      No all the state agencies and agents are like that there is good people and bad when I bought my house in Sintra between 2018/2019 I did have a great agent a honest guy and very professional in that one I cant complain . I don’t know what part of the country that you are in Madeira or mainland but sometimes if you know someone that bought and even invest in Portugal many times they know a good agent or someone that can help you to invest without getting taking for a ride or ripoff .

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    • It’s called the housing market. Why, because it’s a market dictated by supply and demand. The alleged greedy property agent is, by getting his client the maximum rent and increasing his own commission, doing what is required of him. If the rent is set to high, the property is not let and neither the agent or owner profit. Alleged greedy owners rightly expect a return on their investment bearing in mind they may have mortgages on those properties, and therefore set the rents at the maximum people are prepared to pay based on accommodation, location and facilities. Tenants set that rate, if they can’t pay the rent demanded then they have to lower their expectations until they find a property that is both suitable and affordable. No one benefits from empty properties. Owning letting properties for 40 years I could have set a lower rent, made a loss and been forced to sell, which wouldn’t have been of advantage to me or my then homeless tenants.

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  5. Well Hobbes may be you could buy a property and rent it Nicol at a low rent for 9 months a year and then you would both be happy.

    Madeira offers great weather, wonderful lifestyle, low cost of living, a good private health service which is affordable, and I understand the education system is also good. The people are friendly and kind. Most Madeirans speak some English which is the generally accepted 2nd language.

    Housing is affordable and not expensive compared with other comparable destinations. Rent is only high if you want to live in Funchal or wish to rent short-term. If you can’t earn enough money to afford the cost of living in Madeira then perhaps you need to find a cheaper destination.
    Good luck with that.

    PS Digital Nomads earn on average $50,000 to $100,000 a year because they have the qualifications and experience that are needed worldwide. Consequently they can afford to pay short-term rent and spend an average of £1,000 a week on living which benefits the local communinty.

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  6. Excellent Post! Rental rates are very similar in most countries in Europe!
    Have you ever considered that if the owners lowered the rents just what kind of people we would be attracting to Madeira?
    I think maintain the rental rates similar to those in neighbouring countries. This way we are not inundated with people looking for freebies and when they dont get them whining about greedy and corrupt locals.
    Unfortunately most of the locals cannot afford these rents but then the goverment who taxes the owners getting the rent should be supplying housing or lowering interest rates for the locals. This way everyone wins.

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  7. Agents don’t have control over property prices. It’s the owners, especially those foreigners who snag properties and flip them for crazy profits, making it tough for locals.Probably someone like you that cannot take advantage of the locals like you would like too.

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      • So if you were in the position of owning a letting property, what would you do? If you bought a property, let’s call it property A, as an investment and found out the identical property, B next door, was being let 2000 Euros a month. You do your sums and after allowing for Agents costs, renewals, repairs, non payment of rents and times when the property was not let, you are still clearing a profit at a rental of 1500 Euros a month. Would you would let it at the lower figure?

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  8. And what seems that may people forget to say around where is that many owners of house them prefer going AL and only rent to the tourists for holidays or to digital nomads for long period of time and not to the local population are complete out of this situation and the market . Many of this owners of AL and even landlords are trying to not rent to the local population to avoid certain problems that comes with the long rental accommodation but cant say that all tenants are bad and bring problems there is also good tenants .

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  9. George I own property in Madeira, but not for rental purposes, and yes, if I were to go down that road, it would be at a going market rate, however, I do believe the Madeirans have outpriced themselves.

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  10. Daniel, thank you for an honest answer. Because of the continual growth in air traffic, at the moment, I think rental prices will rise for a while longer. A lot depends on flight prices, my flights next week £242 inc. luggage for two. Goes a long way to subsidizing my accommodation.

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