by admin With the increase in the investment limit, only the expensive suburbs of Attica and the cosmopolitan islands will benefit.
The Golden Visa granting program for the acquisition of property with minimum value of €250,000 depending on the investment opportunity, added to the domestic real estate market 1,035 property sales in 2021, 938 in 2020, 3,535 in 2019, 1,833 in 2018, 959 in 2017, 488 in 2016, 421 in 2015, 338 in 2014 and 21 in 2013, which was the first year of implementation of the program. We should point out that until 2019 the golden visa was only granted with an investment in real estate with a minimum value of 250,000 euros. Now, apart from the purchase of real estate, licenses are also granted with investments in shares, bonds and deposits.
Negative balance in the first half of 2022
The first half of 2022 is the first time when the balance of investment arrivals – departures is negative. According to the data obtained from the Ministry of Immigration and Asylum – General Secretariat of Immigration Policy, all issued five-year residence permits to real estate investors of at least 250,000 euros, but also to investors now in intangible securities (shares, bonds, deposits), record losses up to 5.66%. That is, from the total of 9,614 permits that were granted from the start of the program until 31/12/2021 (and were active six months later) the total number of active permits has decreased by 539, now numbering 9,074. In absolute numbers, a total of 678 investors left in the first half of 2022, compared to 143 investors who obtained a five-year residence permit through the golden visa program. It is worth mentioning that, even in the midst of covid-19, no losses of active permits were recorded; on the contrary, issuances of new residence permits to investors were recorded, but they were significantly limited due to the measures against the pandemic.
Investors who abandoned golden visa
Based on the data of the General Secretariat of Immigration Policy of the Ministry of Immigration and Asylum, out of 6,391 active golden visa permits for Chinese nationals, who were issued until 31/12/2021, 442 Chinese nationals left and the active permits now number 5,949. Let’s not forget that 66.4% of investors of the Golden Visa program are Chinese, occupying the 1st position – essentially the Chinese have been sustaining the program all these years. Losses are also recorded in Turkish investors, where 619 active golden visa permits until 31/12/2021, have now declined to 587, recording losses of 5.17% or 32 investors. The Turks occupy the 2nd position of investors in the Golden Visa program in our country with a percentage of 6.4% in total. Justifiable losses due to the sanctions are also recorded among Russian investors, who occupy the 3rd place in the Golden Visa program. From 599 active golden visa permits until 31/12/2021, they have now declined to 431, recording losses of 28% or 167 investors. Losses are also recorded in relation to the total number of permits until 31/12/2021 to Iraqi investors: out of 132 active golden visa permits, they now number 123, recording losses of 10.22% or 9 investors. A similar picture apperas for Egyptian investors: out of 251 active golden visa permits, they now number 229, recording losses of 8.76% or 22 investors. The above data should concern the Ministry of Development because it is the first time since the start of the Golden Visa program in Greece, where investor losses have been recorded.
Limit increase of golden visas to €500,000
It should be noted that in relation to this program and in order to increase the available properties for the Greeks, the investment limit for granting a Golden Visa license has increased from 250,000 euros to 500,000 euros, as announced by the Prime Minister at the Thessaloniki International Forum. The above measure can be characterised as the “tombstone” of the program to attract investors from third countries, if this is applied to the entire country and not to specific geographical zones of high demand and value, e.g. the southern suburbs of Athens, cosmopolitan islands (Mykonos, Santorini), etc. Let’s not forget that in the first half of 2022 (with a minimum investment of €250,000) Greece lost 678 investors, compared to 143 investors whoobtained a five-year residence permit by the golden visa program, according to the data posted by the Ministry of Immigration and Asylum General Secretariat of Immigration Policy until 31/6/2022. Until today, 85% of the investors focused on the southern suburbs of Attica and in the centre of Athens; this suggests that the above program never worked at a national level, which should have been its main operating objective. Now, with the increase of the investment limit, only the expensive suburbs of Attica and the cosmopolitan islands will benefit. In addition, any hope of reviving real estate market, investment interest, tourism development and new jobs in areas of the periphery (e.g. Achaia, Ilia, Aetoloakarnania) that are in immediate need, has now failed.
In support of the periphery
In our articles, we have often stated the necessity to increase the investment limit in specific suburbs of Attica and in the cosmopolitan islands and/or in geographical zones with high investment demand, but, at the same time, to retain the limit of €250,000 and/or to reduce it by 25%-30%, for regions and geographical zones of low investment demand, whose economy must be supported, such as Western Greece. Based on its population, the Region of Western Greece (Achaia, Ilia, Aitoloakarnania) is the fourth largest in Greece, but at the same time, it ranks among the three Regions with the highest unemployment rates in the country. It is characterised by strong age inequality of unemployment, with young people aged 12-24 facing the greatest challenges, followed by the 25-34 age group. Furthermore, according to statistics from the Public Employment Service, in December 2021, the registered unemployed in the Region of Western Greece reached 79,206 people, of which 47,810 people have been unemployed for more than 12 months. The largest volume of that unemployed, reaching a percentage of 55%, includes productive generations between 25 and 55 years of age. The emerging touristic attraction of Western Greece, with a coastline of more than 80 kilometres and distinct natural diversity, which can be the “Apple of Eris” for investors, now tends to remain the “sleeping giant” of Greek development.
We have continuously emphasised the need for immediate action and implementation of a joint ministerial decision, to diversify the investment amount for real estate in areas of the periphery, taking into account factors such as development targets, tourism potential and geographical location, especially after the reduced attendance of investors in the midst of the pandemic. By contrast, the government announced in the Thessaloniki International Forum an increase in the investment limit to €500,000 without any explanation why. We want to believe that the co-competent ministries, in the future clarifications we expect to receive, will consider the above possibility of differentiating the investment limit and at the same time offer additional incentives to investors who want to join the olden Visa program. Some incentives offered by Portugal can be adopted by Greece. In addition, if the announcement to increase the investment limit to €500,000 is a trick by the government to speed up investors until the legislative change of the limit, then, very immediately, the Greek Golden Visa investment program should demonstrate strong investment interest.
Portugal’s trick
In 2020, Portugal recommended that golden visas are no longer available to investors buying in Lisbon, Porto and the Algarve. This was designed to curb speculation and keep prices affordable in the nation’s major cities, as well as to encourage investment in lower-density parts of the country, such as smaller cities, with the goal of economic growth and to support the real estate market at a national level. Lisbon and Porto attracted investors’ attention after Portugal announced that it would remove both cities from the Golden Visa program from early next year on January 1st, 2021. This resulted to the acceleration of investment interest in the two cities for the Golden Visa program. Portugal wrote its own ‘success story’ with losses of only 5% in 2020 compared to 2019. In retrospect, this move was proven to be a “trick” of the Portuguese government to support the real estate market during the covid-19 period, and at the same time, to approach foreign investment funds.
On February 12th, 2021, the Portuguese government announced in the official newspaper Diário da República the changes to the program that would initially apply from July 1st, 2021 and after extensions, would apply from January 1st, 2022 due to the strong interest. Now, from January 1st, 2022, the rules of the scheme have changed and the government applied geographical restrictions to the eligible areas for real estate investment. The success story of Portugal continues in 2022. According to the published data, in the first 6 months of 2022, Greece has issued 143 new licenses to investors from third countries. Portugal, for the same period, has issued 649 new permits to third country investors according to the state agency Serviço de Estrangeiros e Fronteiras (SEF), of which 105 to Chinese, 45 to Brazilians, 44 to Indians. In June 2022, total investments in Portugal’s Golden Visa program amounted to more than €77.9 million, an increase of 44% compared to May 2022 (€53.8 million), and more than double compared to June 2021 (€36,4 million).
The new real estate investment requirements to obtain a Golden Visa in Portugal
Residential property: Purchase of residential property in designated inlands 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 in need of renovation (requires approval from the state agency SEF). If the residential property is located in a designated low density area, then a 20% discount applies (i.e. €400,000 and €280,000 respectively). Commercial properties: Buy a 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 in a designated low density area, then a 20% discount applies (i.e. €400,000 and €280,000 respectively). Buying real estate in Madeira or the Azores: Buying residential and/or commercial real estate anywhere in the autonomous Portuguese islands of 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.
Source:
Themistocles Bakas, 9/10/2022