Explosion of applications for "golden visa" - Why are foreigners turning to Greece

 Explosion of applications for "golden visa" - Why are foreigners turning to Greece

The increase in applications for "golden visas" is explosive in view of the doubling of the minimum investment limit, causing a rise in real estate prices in some areas - Which countries are the most investors from.

26.04.2023

Investors from third countries outside the EU will have three more months. in order to be able to "lock in" deals to acquire properties at the reduced price of €250,000, thus securing the coveted residence permit, but also the property of their choice in terms of location, before the minimum cost increases to €500,000.

In the recent law on the new immigration code, of the Department of Immigration Policy, published in the Official Gazette a few days ago, a provision is provided which stipulates that the time frame for signing a preliminary agreement (or even a final contract of sale) with the existing price of 250,000 euro is extended, from April 30, which was until now, to July 31.

Until then, interested investors will be able to proceed with agreements to acquire properties in the center, in the south and in the northern suburbs with a lower investment limit of 250,000 euros. From August 1 onwards, and as long as no further extension is granted, those who wish to obtain a residence permit and at the same time want to acquire a property in the above areas (as well as in Mykonos, Santorini and the Municipality of Thessaloniki) will have to invest at least 500,000 euros . Those who have signed pre-agreements by July 31 will have until the end of 2023 to proceed with the signing of the final purchase and sale contracts and to apply for the issuance of the residence permit for themselves and their family members.

In this context, there is a "frenzy" of buying and selling in the market, as investors try to catch the relevant deadlines. This situation has essentially taken shape since the previous September, shortly after Prime Minister Kyriakos Mitsotakis reported to the previous TIF, for doubling the investment limit for granting a residence permit. "Already from the end of September, when it became clear that the threshold for investors would change, we saw a significant increase in buying interest, which peaked after the liberalization of travel for Chinese investors, from the end of 2022 onwards," Mr. Alexandros Risvas, head of the Risvas & Associates law office, which specializes in investment immigration programs, reports to "K".

In the popular areas the minimum investment that secures the residence permit increases to 500,000 euros after July 31.

The above is reflected in the official figures published by the Ministry of Migration Policy. From October 2022 until this February, 3,782 requests for residence permits have been submitted by investors.

This is a significantly increased size given that from February 2022 to February 2023 the corresponding number of applications is 5,479. In short, 70% of the applications in this time period were submitted during the last five months, a sample of the momentum that has now been created in the market. During the first two months of this year alone, 1,446 new requests for a permanent investor permit were submitted, a number that is 252% higher year-on-year, when the corresponding figure last year had reached 411 requests. Also, during the same period, the Department of Immigration issued 574 new permits, a number that is 101% higher than last year.

It is worth noting that the inability of the services to respond to this unprecedented demand has now begun to be seen. If the renewal applications from existing investors are also calculated, from February 2022 to February 2023 the applications amounted to 6,922, of which 5,479 concerned new licenses. Of these, only 1,918 licenses were issued and an additional 3,548 licenses are pending.

Explosion of applications for "golden visa" - Why are foreigners turning to Greece-1

Photo INTIME.

Since the entry into force of the "golden visa" program and until today, the Chinese constitute the most numerous category of buyers. Investors from China currently hold 6,314 licenses, a number that makes up 62.5% of the total. In second place are Turkish investors, who have 664 licenses and a share of 6.6%, followed by investors from Lebanon, who have 460 licenses, or 4.6% of the total.

The Lebanese have now overtaken the Russians, who have been barred from obtaining new licenses since last February. Today they are in fourth place on the relevant list with 389 licenses and 3.8% of the total.

Why do foreigners turn to Greece?

An additional reason that Greece is now a key destination for foreign investors who einterested in obtaining a residence permit is the interruption of other popular programs, such as those in Portugal and Cyprus, during the previous months. In fact, according to a related research by the British immigration investment company Astons, only during the previous month, online searches for the Greek program increased by 75.2%. This is precisely the period during which Portugal's corresponding program was abolished, recording a drop of 18.7% in terms of online searches. The second major increase in demand concerns Spain's program, which is also facing possible cancellation. It is recalled that the minimum investment limit in Spain is 500,000 euros. A big drop of 59.2% is also noted by the corresponding investment immigration program of Malta, the last one that gives the possibility of securing a passport.

According to another analysis by Astons, the abolition of the program in Portugal will have another benefit for Greece, as it is estimated that it will turn towards us the majority of American investors who are interested in securing a residence permit and until now chose, as mostly, the country of the Iberian Peninsula. According to the company's analysis, since the health crisis the number of American investors choosing to leave the US has risen sharply. In 2020, this number reached 6,705, being 224% higher than in 2019, while 2022 also saw a further increase of 18%. In this context, Greece and its real estate market are expected to be a key destination for American investors as well. In 2021, Greece was the third most popular country (based on residency applications) for US investors. The 42 applications submitted mark a 740% increase over the mere five applications submitted in 2020.

The numbers

252% increase in requests for issuance of a permanent investor's license during the two months of January - February.

1,446 new requests compared to 411 requests in the corresponding two months of 2022.

574 licenses were issued in the first two months, 101% more than last year.

 

5,479 license applications have been submitted from February 2022 to February 2023.

1,918 licenses were issued during the same period and an additional 3,548 licenses are pending.

Soaring asking prices in downtown areas

The exclusion of the center of Athens as well as the southern suburbs from the possibility of acquiring property, through the "golden visa" program, has triggered a frenzy of buying interest among foreign investors. Especially in the districts of the center, where in the near future it will not be possible to find houses worth at least 500,000 euros, except in very few cases, very close to the Acropolis and within the historical center, a large number of transactions are currently recorded. Explosion of applications for "golden visa » – Why do foreigners turn to Greece-2

This situation has given rise to inflationary trends in the asking sales prices, pushing up to the limit of 250,000 euros properties that otherwise might have been sold at even 50% of this price. Of course, even so, foreign investors set some minimum requirements, such as proximity to the Acropolis, or ISAP and metro stations that are 1-2 stops away from tourist attractions. They are also looking for fully renovated, or even furnished, properties that are suitable to generate significant income, mainly through digital short-term rental platforms.

In this context, according to real estate market operators, districts such as Pagrati, Kypseli, Exarchia and Ampelokipi are recording significant demand. Of course, the highest demand is shown by Koukaki and the areas of the historic center, such as e.g. Metaxourgeio, Kerameikos, Psirri, Plaka and the Acropolis. There, however, there are not many options and they certainly far exceed the minimum limit of 250,000 euros in cost, with the result that many investors choose different points.

On the other hand, the number of foreign investors looking for properties in the northern suburbs to secure a residence permit is much smaller. Nevertheless, several owners believe that they will be able to attract foreigners to sell their properties, with the result that even in these areas significantly higher prices are recorded compared to what was the case a few months ago.

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The young people are trapped in the parental home

Homes are even sold for 50% more than their actual price, reaching the limit of 250,000 euros.

Executives of the real estate market believe that as soon as the limit of 500,000 euros is imposed and it becomes clear, foreigners will prefer other parts of Attica and the deviation will beginraising the asking prices by owners who are currently valuing their properties at unrealistic prices.

Southern suburbs

As regards the southern suburbs and especially the areas up to Glyfada, where the limit of 500,000 euros will apply, it is estimated that the demand will continue to exist in the future, but on a clearly smaller scale than today. Given, however, that there is a much greater abundance of properties at prices above 500,000 euros (something that cannot apply in the center of Athens), especially in the sections that are close to the Hellinikon investment, or with a view of the sea, it is not excluded that some investors continue to choose properties in the southern suburbs as well. In any case, however, the flow to these areas will be clearly lower, at least from the citizens of third countries, who are also interested in the residence permit.

It is recalled that during 2022, foreign capital inflows for the acquisition of real estate in Greece increased by 68% from 2021 and amounted to 1.97 billion euros, from 1.17 billion euros. At the same time, the performance of 2022 exceeded by 37% the previous record set in 2019, when foreign investments had reached 1.45 billion euros.

https://www.kathimerini.gr/economy/562389127/ekrixi-aitiseon-gia-chrysi-viza-giati-strefontai-stin-ellada-oi-xenoi/