Property prices in Greece are finally showing signs of recovery after a decade-long slump, and a significant factor in the revival is the Greek golden visa program.
With a cumulative fall of 42 per cent over the past ten years and a one per cent slide in 2017, property prices in Greece rose by 1.2 per cent in the second quarter of 2018, and 2.5 per cent in the third quarter.
The trend is stronger in capital city Athens, where prices in 2018 have risen by 3.7 per cent, further proof that inflow of foreign investment is fuelling its recovery.
Significance of Greek Real Estate Revival
While the real estate market is generally considered an indicator of a country’s economic prosperity, Greece is different from other countries because property investments account for a significant portion of household wealth.
Average home ownership in Greece stands at 80 per cent, significantly higher than the 70 per cent seen in the wider European Union.
With home ownership so high, a recovery in property prices signals wealth creation for the country as a whole.
About the Greek Golden Visa
Facing economic collapse after the 2008 global recession, Greece introduced its golden visa program in 2013.
Investors were granted a five-year residency visa against a minimum €250,000 real estate investment.
With no minimum physical presence requirement, the residence permit covered the investors, their spouses and children aged below 20 years, and was renewable for further periods of five years as long as the minimum investment requirement remained fulfilled.
Over the past six years, Greece has issued more than 3,400 golden visas with almost half of these going to property investors from China.
Contributing to the Real Estate Sector’s Revival
The Greek real estate revival coincides with a surge in foreign investment inquiries from prospective Chinese investors.
According to a Chinese web portal facilitating foreign property purchases, inquiries have doubled and tripled in the second and third quarter of 2018 respectively.
As the waiting time grows for the US EB-5 investment program, Chinese candidates are considering their options.
Since 2016, foreign investment into Greek real estate has virtually doubled.
The first half of 2018 saw a 41 per cent jump in taxes paid on property sales, indicating the recovery is likely to strengthen in the coming years.
Portugal and Spain also offer golden visas, while Malta and Cyprus offer direct economic citizenship programs, but the minimum investment requirement is significantly higher.
Property prices have fallen so low in Greece that investors can buy multiple buildings to qualify for the €250,000 investment requirement.
Combined with rising demand for holiday homes in Athens and other Greek tourist hotspots, Greece offers the triple benefits of capital appreciation, recurring rental revenues, and EU permanent residence.