:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/VQCAVOMIVRHOVF56YS4TSNFMLI.jpg "Arrival of Digital Nomads In Latin America Brings Negative Economic, Social Impact.")
Bloomberg Línea — In recent years, the mobility made possible by technology has spawned a tribe that traditional employees used to view with suspicion: digital nomads. Prior to the pandemic, such workers, world travelers who adapted their jobs to their interest in settling temporarily in different cities around the globe, numbered in the thousands.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/UL64QWZE5FCMBBVG4H2T6GTMWA.jpg "Moody’s Ups Growth Forecast for Latin America, Fueled by Mexico’s Momentum")
The pandemic reinforced this paradigm shift in the world of work, and it was subsequently adopted by millions of people. According to news agency DW, there are approximately 35 million people who are now digital nomads and Latin American cities are at the forefront in terms of the location preferences among these new workers.
A global survey of CIOs published by Statista stated that 15-16% of the workforce worked remotely before the pandemic and, by 2022, 36% of respondents expected to work in a hybrid model on a permanent basis.
Buenos Aires, Mexico City, Medellín, Lima and Guadalajara (Mexico) lead the list of preferences in the region, according to a survey conducted by Nomad List, a platform that connects digital nomads with different goods and services in the world.
This continuous migratory movement undoubtedly benefits the economy of those cities where digital nomads spend more than average on goods and services during their stay.
“I don’t know if it translates into foreign currency, because many times they charge through digital wallets. However, it has a multiplier effect and a tax impact because of the higher demand for goods and services. It is very important to think about how digital nomads can be incorporated so that they are not just tourists,” said Martín Javier Quiroga Barrera Oro, Director of Urban Planning at Hunt Laudi Studio, an architecture, design and urban planning firm, during a presentation at UNSAM.
He also assured that those who live in Buenos Aires, work abroad and are paid in dollars or euros spend their money in the city and that benefits consumption, whether in gastronomy, shows or in the tourist sector.
However, this phenomenon that generates an economic spillover also for the real estate business has a negative side.
The impact on real estate
For Andrés Olaya, a Colombian public policy analyst, remote work has allowed young middle class people from rich countries to become upper class just by moving to another country. He assures that this has an impact on the popularity of housing in the most central sectors and with better service coverage, because they can pay for better real estate with their salaries, in dollars or euros.
The demand is so high in the most central or fashionable areas that this has had an impact on the price of rents, which increased by an average of 41.3% during the last 12 months, according to Navent group, which owns platforms for buying, selling and renting properties in the region.
In the breakdown of the most important and attractive cities for digital nomads, São Paulo accumulated in the last 12 months a rental increase of 11.62%; Mexico City 13.94%; Buenos Aires 166.74%; Lima 3.63%; and Quito 10.98%, according to Navent data.
As a consequence of the rental increases, access to housing for the original residents has become more limited, and they have been displaced to other neighborhoods or to the periphery in search of better prices.
Moreover, many landlords took their homes out of what is known as a traditional rental to convert it into a temporary rental and to be able to charge in dollars at prices up to three times the original ones, and with a much higher turnover of tenants.
Home-office workers
In March 2023, digital nomads from the US were the most representative nationality of the global digital nomad community, at nearly 50%.
As indicated by job tools platform Resume, in general, self-employed female digital nomads worked primarily in the creative and marketing industries, while men worked more as software or web developers.
The income level of digital nomads, according to a 2023 survey, revealed that approximately seven in 10 reported earnings of between $50,000 and $250,000 per year.
Data from Resume states that London has the most vibrant digital nomad community on Instagram in Europe and the world. New York City is the digital nomad capital of the US and North America. Bangkok is the second busiest place for digital nomads globally.
Buenos Aires is now the most popular destination for digital nomads in South America, beating Rio de Janeiro by 8.3%, which ranks second.
Medellin, Colombia is the third most popular destination in South America.
More than 40 countries now issue special visas for freelancers or digital nomads. Brazil, Costa Rica, Panama, Curacao, Belize, Mexico and Colombia are some of those that began offering such a visa between 2021 and 2022.
In Colombia, for example, the V Digital Nomads Visa allows freelancers and remote workers to stay for 24 months, compared to only six months for regular tourists, and offers a state ID, which means access to banking and the right to register a company in the country.
The Colombian government hopes to attract at least 45,000 digital nomads to the country by the summer of 2024.Nowadays, being a digital nomad is a widespread aspiration. Job portal Bumeran reports that 99% of Chileans, Ecuadorians, Panamanians and Peruvians would like to work while traveling the world, as many occupations were previously unable to do so.
Cost of living and a fast and accessible Internet connection were the main factors when choosing a location for digital nomads in 2022, according to Statista. Security came second, being the most important factor for 15% of the digital nomad community worldwide.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/7UDZIWMRQ4H3AK3CRN4QL4IG2A.jpg "Latin American Companies Are Reconsidering US Ambitions as Listings Flop")
