By Yousra Badra, Senior Data &Analytics Manager, Recognyte
LONDON, May 16, 2023 /PRNewswire/ -- Greece has seen a significant impact from its Golden Visa Program having notched a double digit increase in properties for sale. In Athens, for example, within the Attica region, the local area has seen a substantial increase in the number of properties for sale in Q1 2023. According to data from Recognyte, Athens has 82,750 more residential properties for sale in the 500K - 1M price range, which is a strong 276% increase over the same quarter last year in 2022. The numbers represent a combined growth of houses at 37.8% and apartments at 62.1%.
Greek Golden Visa Plan first Launched in 2013 with a Low Investment Requirement of €250,000.
When first launched in 2013, the Greek Golden Visa Program granted a five-year residence permit in exchange for as low as a €250,000 real estate investment in Greece. Successful applicants were able to include family in the residency program while being allowed to live in Greece and travel across the Schengen region without a visa. Among the Golden Visa programs in Europe, Greece has offered the lowest investment threshold.
Golden Visa Program Requirements Increased in 2020
As popularity increased, a change to the Golden Visa plan was announced in 2020 which required twice as much as the initial minimum investment in some locations. Changes were prompted by the sharp rise in supply being put on the market, which had the effect of raising home prices appreciably for the country's own citizens. Specifically, the program increased the requirement to €500,000 in order to purchase a Greek real estate property within the municipalities of Athens, Thessaloniki, Mykonos, and Santorini. The increase is officially effective after May 1st, 2023.
Overall, the Greek Golden VISA remains as an attractive offer. Within 2022, a total of 4,264 applications were submitted for the issue of new licenses, a number which together with renewal applications increased to 5,547. Besides residency, benefits include additional national and cultural positives that include safety and security, rule of law, high quality educational opportunities, and access to quality health care. Greece also offers highly desirable aesthetic qualities sought after by tourists and visitors from around the world.
Weakness of the Euro Caused the Program to Become More Attractive to Foreign Buyers
While the program itself comes with its own benefits, the weakness of the Euro vs the dollar and other currencies has amplified the attractiveness of these residential investments for those outside of the Eurozone.
Prior, the ECB had acted more slowly than the US in raising interest rates in an attempt to curb inflation. As a result, in July 2022, the Euro reached a low of $1, a record number marking the lowest exchange rate in 20 years. Greece, as a member of the EU, became more attractive to those outside of the Eurozone who can buy more for less while the dollar remains stronger against the Euro.
The sudden urgency to obtain the Visa at a lower investment price combined together with the weakened Euro to form a strong catalyst for the rapid increase in the number of these properties coming to market. Investors who pay a 10% deposit before July 31st 2023 are exempt from the cut-off and are still able to complete the transaction under the older €250k requirement established in 2013.
By the numbers, data show 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 requests registered during the same period last year (2022).The EU has recommended to its member countries that they abolish the Golden Visa program, but Greece has not followed those recommendations. Currently, the most requests are coming from China (62%), followed by Turkey (7%) Lebanon (4.6%) Russia (3.8%) - China leads the countries not using the Euro and taking advantage of its affordability and investment potential.
China accounts for nearly two-thirds of all VISA requests. Chinese nationals and the country's burgeoning middle class are yearning for a better quality of life, and in many cases are looking for freedom and a global lifestyle independent of the prosperity pledged by their national authorities. The rising price of property in big cities in China is an additional factor. In Beijing, a 90 sq. m. flat may cost well over €1 million, which dwarfs the €250,000 (or now in some cases €500,000) threshold for real estate purchases in Greece.
*GR golden via applications by month Jan-Feb 2022 (316) vs Jan-Feb 2023 (1,262) = 299% increase
Program Met With EU Disapproval and Concerns from Prime Minister Kyriakos Mitsotakis
The decision to increase the minimum investment required was largely because outside investors were buying up Greek properties to the extent that Greeks were being pushed and priced out as rental property prices were going through a sharp increase. The concerns were echoed by Prime Minister Kyriakos Mitsotakis, as it was determined that real estate needed to remain affordable for Greece's own citizens. The EU also advised that the program should become more limited for many of the same reasons. The possibility of money laundering and other forms of corruption were also discussed by the EU in terms of the policy's downside of offering citizenship through investment.
Questions remain about limits to the recent surge in real estate prices and whether or not popular Greek cities will eventually become colonized by foreigners taking advantage of the investment threshold for residency. Certainly the liquidity and value of these properties is at a new high when compared to the fall-out from the debt crisis the Greek Islands have become known for. Until then, investors and Greek citizens will be keeping an eye on the affordability of properties in Greece as long as the Golden Visa Program remains attractive to foreign investors.
About the author
Yousra Badra is a Data & Analytics Product Manager for Recognyte who has a deep understanding of data analytics and delivers successful software & SaaS using cutting-edge technology, artificial intelligence, big data and process automation. She achieves results through a commitment to learning and development and creates value for clients by owning the product vision, feature roadmap, and Go-To-Market strategy. www.recognyte.com
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