Digital nomads love the lifestyle but is it fair on locals?

There's a new wave of remote work lifestyle and it's in danger of pricing locals out of real estate in some of the world's most beautiful tourist cities.

Residz Team 4 min read

During the pandemic the “staycation” (a holiday at home) became popular, but increasingly many of us yearn for a “workation” - where we take off to exotic places but take our work with us.

It’s a trend that is picking up momentum, and has been described as “a new wave of remote work lifestyle”.

Of course, a workation sounds marvellous for the worker, but what is this trend doing to local real estate and holiday lets?

When digital nomads move into a local community and are able to pay higher prices for real estate, it can push up property values and rents, making it more difficult for local residents to afford housing.

Here we update what we understand about the digital nomad in 2023.  

Swapping the office for a tropical paradise

According to property company Homa, which holds a portfolio of rental apartment properties and co-living spaces across Thailand, a workation trip can find you working from the beach, cafes, or a tropical resort.

Homa says many countries have begun to adopt policies that support “workation tourism” - such as Dubai which approved a new Remote Visa Scheme to welcome employees from all over the world to work remotely from the UAE.

According to the IFC Review, digital nomads are usually younger, semi-retired or entrepreneurial remote workers (usually in tech) who have opted for a nomadic life wholly dependent on technology, Wi-Fi and hotspots for productivity.

In Australia, we saw how digital nomads embracing sea changes and tree changes during the pandemic drove up regional real estate prices.

Now these salaried workers are spreading out across the world, snapping up holiday and residential accommodation as they enjoy a change of environment.

Top cities for Workations

In 2021, Holidu's Workation Index ranked 150 cities worldwide as the best places to work remotely.

They looked at:

No doubt penalised for our high cost of living, Australian cities weren’t listed among the top 10.  

Sydney came in at number 53 (out of the list of 150 cities), Melbourne at 55, Brisbane at 99, Perth at 109, and Adelaide at 118.

The Top 10 places to enjoy a “workation” were:

1. Bangkok, Thailand

2. New Dehli, India

3. Lisbon, Portugal

4. Barcelona, Spain

5. Buenos Aires, Argentina

6. Budapest, Hungary

7. Mumbai, India

8. Istanbul, Turkey

9. Bucharest, Romania

10. Phuket, Thailand

But, as anthropologist Dave Cook said in a recent article for The Conservation, the rise of professional short-term-let landlords offering accommodation for digital nomads in these locations is helping to price local people out of their homes.

Types of Digital Nomads

Dave says his research shows there are five types of Digital Nomads.


He says the most recent estimates put the number of digital nomads from the US alone at 16.9 million, an increase of 131% from the pre-pandemic year of 2019, and the phenomenon is reshaping cities.

“For some nomads, this is an essential life-hack. For others, it represents the polarising reality of globalisation: that the entire world should operate as an open, free market. To many, it is unethical,” he says.

Fairness questioned of locals competing with digital nomads

There can be a fairness issue when high-earning digital nomads outprice locals in real estate.

This can lead to gentrification and displacement, where long-time residents are forced to move out of their communities because they can no longer afford to live there.

Digital nomads may also have an unfair advantage when it comes to purchasing property.

They may have access to higher salaries or savings, which can allow them to pay more for a property than a local resident who has lived and worked in the area for many years.

This can be particularly problematic in areas where property ownership is limited or scarce, such as in popular tourist destinations (such as the Top 10 Workation Destinations) or areas with limited land availability.

To address this fairness issue, some communities are implementing policies that aim to protect affordable housing for local residents, such as rent control or affordable housing quotas.

But, equally important is for digital nomads to be mindful of the impact they have on local communities and to be responsible members of those communities.

This can include supporting local businesses, respecting local culture and customs, and contributing to local charities or community organisations.

More research with Residz

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References:

Jap Sukchan, 2023, “The Benefits of Workation: The ultimate trend for work-life balance”, and “The Rising Trends of Digital Nomads and Remote Working 2023”, HOMA website.

Julian Dik, 2023, “Remote working: how a surge in digital nomads is pricing out local communities around the world”, The Conversation. (Also graphic: “The Five Categories of Digital Nomad”).

“The Best Cities for a Workation”, 2021, Holidu.co.uk

Adela Toulon-Foerster, 2022, “Rise Of The Digital Nomad”, IFCreview.com

Photo by Marvin Meyer on Unsplash