Filenews 16 August 2022
By Eleni Bota
Foreign investors are turning their backs on the "golden visa" program with the acquisition of a property with a minimum value of €250,000.
The first 6 months of 2022, is the first year that the balance of arrivals - departures is negative. According to the data resulting from the Ministry of Migration and Asylum – General Secretariat for Migration Policy, the total number of five-year residence permits issued to real estate investors of at least €250,000, but also to investors now in intangible securities (shares, bonds, deposits) records losses of 5.66%. That is, out of the total of 9,614 licences that were granted from the beginning of the program until 31/12/2021 and were active, six months later, the total of active licenses is reduced by 539, now numbering 9,074.
According to the data of E-Real Estates Nationwide Network of Real Estate Agents in terms of absolute numbers, a total of 678 investors withdrew in the first 6-half months of 2022, compared to 143 investors who through the golden visa program obtained a five-year residence permit.
It is worth mentioning that, even in the midst of covid-19, they did not record any losses of active licences, on the contrary, new licences were issued to investors, but, they were significantly limited due to the measures in force against the pandemic.
Never since the start of the ambitious investor attraction programme has there been a numerical decline in total licences, such as the one recorded in the first 6 months of the year.
Investors who "abandoned" the Greek golden visa
Based on the data of the General Secretariat for Migration Policy of the Ministry of Migration and Asylum, out of 6,391 active "golden visa" licenses to Chinese that were issued until 31/12/2022, 442 Chinese withdrew and the active permits now number 5,949. It should be noted that 66.4% of investors in the golden visa program are Chinese investors, holding 1st place.
Losses are also recorded by Turkish investors, where from 619 active "golden visa" licences until 31/12/2021, they now have declined to 587, recording losses of 5.17% or 32 investors. The Turks hold the 2nd place of investors in the golden visa program in Greece with a percentage of 6.4% of the total.
Justified losses due to sanctions are also recorded in Russian investors, who hold the 3rd place in the golden visa program. From 599 active "golden visa" licences until 31/12/2021, they now have declined to 431, recording losses of 28% or 167 investors.
Losses are recorded in relation to the total licenses until 31/12/2021, to Iraqi investors who from 132 active "golden visa" licences, now number 123, recording losses of 10.22% or 9 investors. A similar picture for Egyptian investors where, out of 251 active "golden visa" licences, they now number 229, recording losses of 8.76% or 22 investors.
Investors who "chose" the Greek golden visa
Investors from Iran record a positive sign, where from 198 active "golden visa" licenses until 31/12/2021, now number 229, ie 31 new investors. An increase in investors by 14.15% is recorded by the Americans where from 106 active "golden visa" licences until 31/12/2022, they now number 121, i.e. 15 new investors. At the same time, an increase is recorded by 11.07% in investors from Lebanon where they now number 341 from 307 on 31/12/2022, as well as in investors from other countries where from 815, they now number 872.
Greece Vs Portugal
In 2020, the golden visa program recorded losses of 73.4% compared to 2019, when Portugal recorded losses of just 5%. Note that the golden visa program in Portugal requires an investment of €350,000 for old properties that need renovation and require approval from the SEF service of the Ministry of Interior or €500,000 if they are newly built.
By the end of 2020, Portugal's golden visa programme had generated investments worth more than €5.5 billion since its launch in 2012 and more than 15,500 residence visas have been granted.
In 2021, the golden visa program recorded a positive course compared to 2020, increasing the issuance of new licences by 10,3%, reaching 1,035 new issues to investors. Portugal, on the other hand, recorded losses of 26.8%, from 1,182 residence permits to investors in 2020, to 865 investors in 2021.
87% of investors in Portugal chose to buy properties worth at least €500,000. The top on the list of investors in order were the Chinese, the Americans, the Russians and 4th the Brazilians.
Finally, according to the published data, Greece in the first 6 months of 2022, has issued 143 new licenses to third-country investors. Portugal for the same period, has issued 649 new ones to third-country investors according to the state-owned organization Serviço de Estrangeiros e Fronteiras (SEF), of which 105 to Chinese, 45 to Brazilians, 44 to Indians.
In June, total investment in Portugal's golden visa program amounted to more than €77.9 million, an increase of 44% compared to May (€53.8 million), while more than doubling from €36.4 million recorded in the same month of 2021.
Portugal's changes to the Golden visa program
In Portugal, the majority of investors targeting the Golden Visa had focused on metropolitan hotspots such as Lisbon and Porto or on popular, tourist-friendly coastal areas, such as those located on the beaches of the Algarve. That is, a similar picture observed in Greece in recent years regarding the Southern Suburbs of The Prefecture of Attica (Glyfada, Paleo Faliro, Alimos, Voula, etc.) that approach 80%-85% of investors.
Based on the above in early 2020, the Portuguese government recommended that golden visas should no longer be made available to investors buying in Lisbon, Porto and the Algarve. The move was designed to curb speculation and keep prices affordable – accessible to the nation's major cities, as well as to encourage investment in the country's lower-density places – in smaller cities, with the aim of their economic development and support for the real estate market nationwide.
Lisbon and Porto came to the fore after Portugal announced that it would remove both cities from the Golden Visa program, from the beginning of next year i.e. on January 1, 2021, as a result of which Portugal accelerated investment interest in the golden visa program and wrote its own success stories with losses of only 5% in 2020 compared to 2019, being in retrospect a "trick" of the Portuguese to support the real estate market in a period of covid-19 and at the same time to reach foreign investment funds.
On February 12, 2021, the Portuguese government announced in its official newspaper Diário da República the changes to the golden visa program that would initially apply from July 1, 2021 and after extensions would apply from January 1, 2022 on the occasion of the strong interest.
Now, as of January 1, 2022, the rules of the program have changed and implemented geographical restrictions in the areas eligible for real estate investments. The houses are now only available for investors in the interior of Portugal and its islands. Therefore, investing in popular cities such as Lisbon or Porto is only possible if the investment is in commercial/non-residential real estate, such as offices or shops.
The new rules actually expand geographical availability within Portugal and on popular islands such as Madeira and the Azores, while supporting domestic real estate in commercial real estate.
The investment requirements in real estate for obtaining a Golden Visa in Portugal:
Residential properties: Purchase of residential property in designated inland areas of Portugal worth at least € 500,000 or € 350,000 if you invest in a restoration project or if the property is over 30 years old and needs renovation (they require approval from the state-owned SEF). If the residential property is located in a designated area of "low density", then a 20% discount applies. (i.e. €400,000 and €280,000 respectively)
Commercial real estate : Purchase of commercial property anywhere in the country worth at least € 500,000 or € 350,000 if you invest in a restoration project. If the commercial property is located in a designated area of "low density", then a 20% discount applies. (i.e. €400,000 and €280,000 respectively)
Purchase of real estate in Madeira or the Azores : Purchase of residential and/or commercial real estate anywhere on the autonomous islands of Portugal, Madeira and the Azores, worth at least € 500,000 or € 350,000 if you invest in a restoration project. Madeira and the Azores are classified as high-density, so there is no 20% discount option.
The investment requirements for obtaining a Golden Visa in Greece:
Minimum amount €250.000 for the purchase of a property. Whether the property is newly built, or the property needs renovation, or the property is over 30 years old, or the property is located in the Municipality of Athens, or in the Southern Suburbs (Elliniko, Glyfada, Voula, etc.), or within the Metropolitan Park, or in regional urban cities (Thessaloniki, Patras, Kalamata, etc.), or in towns. A basic condition is the investment of the minimum amount of €250,000 for the purchase of a property within the Greek territory.
What Greece can do
The investment program "golden visa", should be directly adapted to international trends, international data and based on competition. Changes are urgently needed that will act as an incentive to create a new "wave" of investors.
Greece has all the appropriate "tools" and legislative frameworks that allow them to make changes that will aim at the immediate attraction of investment capital.
The immediate implementation of the possibility given through a Joint Ministerial Decision of the co-competent ministries to vary the amount of investment in real estate in areas of the territory is required, taking into account elements such as development targeting, tourist development and geographical location.
The above application will accelerate the attraction of foreign investors within the year, will be an incentive for the Regions that want to take part in the development policy and play a role in the tourism industry and at the same time will be a helper, so that the "golden visa" program will now operate at a national level and not, as until today, when 85% of the investments are concentrated in the Prefecture of Attica.
Greece could immediately announce an increase in the investment limit in the Prefecture of Attica or in specific suburbs from the beginning of 2023 and at the same time the maintenance of € 250,000 and / or the reduction of the new investment limit by eg. 25%-30%, in Regions where their economy must be supported.
At the same time, the control of the value of the property by certified appraisers registered in the registers of the Ministry of Finance should be applied, in order to avoid cases of the past that discredit the domestic real estate market and the golden visa investment program.
Source: Capital.gr
