Very low property valuations, a real-estate market that has bottomed out, twin advantage of long-term capital gains and short-term rental income, are some factors that have prompted wealthy Chinese and Russian investors to make a continued move towards Greece and its Golden Visa program.
The Golden Visa investment immigration program offers permanent residence to foreigners investing as little as EUR 250,000 in the property market. This is significantly lower than the EUR 500,000/350,000 investment requirement under the real estate category of Portugal’s program.
The Schengen Agreement guarantees easy access virtually all EU nations, which is a significant advantage for investors who can bypass onerous physical residence requirements and yet reside within the European Union.
While nations from all over the world, including European nations like Malta and Cyprus offer residence and even citizenship through investment, the Greek property market presents significant advantages that, combined with the golden visa, makes it a very attractive proposition.
Revival of the Real Estate Market
Prices of five-year old apartments in the capital city of Athens have fallen by 45% since 2008 even as the economy slumped by 25% post the 2008 economic crisis. Average real estate prices per square meter hover around EUR 2,850. To put things in perspective, prices are 300% higher in Italy and Austria, 150% in Spain and Germany, and 35% in Portugal.
Rental income from Tourists
Further, the economy is finally showing signs of bottoming out, which brings the probability of the country’s exit from the EU to zero. As economic troubles recede, recovery in the country’s tourism sector is likely to speed up, which is evident from the 10.3% increase in number of visitors in the first nine months of 2017 as compared to the previous year.
Inflow of tourists and students has contributed to rising demand for short-term rental properties, which means real estate investors can look beyond long-term gains and generate short-term recurring income through rental agreements.
E-Auction Purchases
For Greek banks, foreign investment demand is helping them reduce their non-performing assets through e-auctions. For investors, it offers an opportunity to avoid middlemen and buy properties directly from the seller.
Thus, investors shall benefit by high capital gains from the inevitable increase in property prices, cash income through inflow of tourists and students, and, of course, the right to live, work, and travel inside the EU with minimal restrictions.
The Golden Visa
Cheaper than other EU investment immigration programs and not having onerous conditions like creation of jobs or establishment and management of businesses like the EB-5 visa, buyers from China, Turkey, and Middle-Eastern countries prefer, the Greek golden visa as a discreet and reliable backup option from political, social, and economic instability.
The third quarter of 2017 saw a 159% jump in real-estate investment inquiries by Chinese buyers with the golden visa being the primary reason for the spike in demand. Greece is being preferred over Portugal or Spain, other Golden visa countries popular among Chinese, because the former is closer by air as compared to Barcelona and Lisbon.
Over a four-year period since 2013, Greece has issued 2053 golden visas with Chinese investors accounting for around 883 visas. Russians are the second-biggest investors with 382 visas followed by Turkey at the third post. Till date, the program has netted foreign investments worth EUR 513 million.
Further reading