Golden Visa: Athens supply soars as investment limit rises

The impact for Greece from the Golden Visa program is significant, having recorded a double-digit increase in properties for sale,  based on an article that is authored by Yousra Badra, Senior Director Data & Analytics at Recognyte.

In Athens, for example, within the Attica region, there has been a significant increase in the number of properties for sale in the 1st quarter of 2023.

Athens has an additional 82,750 residential properties for sale in the 500,000 – 1 million price range, which is a strong 276% increase over the same quarter last year in 2022. The figures represent a combined increase of 37.8% in residential and apartments at 62.1%.

The Greek Golden Visa Plan was first launched in 2013 with a Low Investment Requirement of €250,000. When it first started in 2013, the Greek Golden Visa program granted a five-year residence permit in exchange for a €250,000 real estate investment in Greece.

Successful applicants were able to include their family in the residency program while being allowed to live in Greece and travel to the Schengen area without a visa. Among the Golden Visa programs in Europe, Greece has offered the lowest investment limit.

Golden Visa program requirements increased in 2020

As popularity grew, a change to the Golden Visa scheme was announced in 2020, requiring double the original minimum investment in some locations.

The changes were caused by a sharp increase in the supply placed on the market, which resulted in a noticeable increase in housing prices for the country’s citizens. Specifically, the program increased the requirement to 500,000 euros for the purchase of Greek property within the municipalities of Athens, Thessaloniki, Mykonos and Santorini.

Overall, the Greek Golden VISA remains an attractive offer. Within 2022, a total of 4,264 applications were submitted for the issuance of new licenses, a number that together with renewal applications increased to 5,547. In addition to residency, benefits include additional national and cultural positives that include security, the rule of law, high-quality educational opportunities, and access to quality health care. Greece also offers special aesthetic qualities that are sought after by tourists and visitors from all over the world.

The weakness of the euro made the program more attractive to foreign buyers

While the program itself has its own benefits, the weakness of the euro against the dollar and other currencies has strengthened the appeal of these residential investments for those outside the Eurozone.

Previously, the ECB had been slower than the US to raise interest rates in an effort to curb inflation. As a result, in July 2022, the euro hit a low of $1, marking the lowest exchange rate in 20 years. Greece, as a member of the EU, has become more attractive to citizens outside the Eurozone because they can buy more for less, while the dollar remains stronger against the euro.

The sudden urgency to acquire a Golden Visa at a lower investment price combined with the weakened Euro are a strong catalyst for the rapid increase in the number of these properties coming to market. Investors who make a 10% deposit before July 31, 2023 are exempt from the cut-off and can still complete the transaction under the older requirement of €250,000 set in 2013.

According to the figures, the data shows that applicants for the Greek Golden Visa program increased by 299%, reaching a total of 1,262 applications in the first two months of 2023, compared to 316 applications registered in the same period last year (2022). The E.U. has recommended that its member states abolish the Golden Visa program, but Greece has not followed these recommendations. Currently, most requests come from China (62%), followed by Turkey (7%), Lebanon (4.6%) Russia (3.8%) – China leads non-users the euro and take advantage of its affordability and investment potential.

China accounts for nearly two-thirds of all VISA applications. Chinese nationals and the country’s rising middle class yearn for a better quality of life and in many cases seek freedom and a global lifestyle independent of the prosperity promised by their national authorities. The increase in the price of real estate in China’s mega-cities is an additional factor. In Beijing, a 90 sq.m. apartment can cost well over €1 million, which exceeds the threshold of €250,000 (or now in some cases €500,000) for property purchases in Greece.

The program met the disapproval of the E.U. and the concerns of Prime Minister Kyriakos Mitsotakis

The decision to raise the minimum required investment was largely due to foreign investors buying up Greek property to the extent that Greeks were being squeezed and priced out as property rental prices skyrocketed. Prime Minister Kyriakos Mitsotakis also echoed the concerns, as it was established that the properties had to remain affordable for the citizens of Greece. The E.U. it also recommended that the program should be made more restrictive for many of the same reasons. The potential for money laundering and other forms of corruption was also discussed by the EU as a downside of the citizenship by investment policy.

Questions remain about the limits to the recent rise in property prices and whether or not popular Greek cities will eventually be colonized by foreigners taking advantage of the investment limit for accommodation. Certainly the liquidity and value of these properties is at a new high compared to the fall from the debt crisis for which the Greek islands have become known. Until then, investors and Greek citizens will monitor the affordability of real estate in Greece as the Golden Visa program remains attractive to foreign investors.

www.recognyte.com.

* Recognyte is a PropTech company leading the way in combining real estate data, AI-powered analytics, and business productivity tools to create value across the real estate lifecycle for investors, lenders, professional services firms, and insurers.