Housing supply soars following increase in investment limit for Greek Golden Visas

Greece has seen a significant impact from the Golden Visa Program, having recorded a double-digit increase in properties for sale, points out an information note by the international house PRN of London on investments in the real estate market, published by APE MPE. As the investment house emphasizes:
“In Athens, for example, within the Attica region, the local area has seen 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 price range of 500,000 – 1 million, which is a strong 276% increase over the same quarter last year in 2022. The numbers represent a combined increase of houses to 37.8% and apartments to 62.1%.
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 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. The increase officially applies after May 1, 2023. 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 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.
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 record low of $1, marking the lowest exchange rate in 20 years. Greece, as an EU member, has become more attractive to those outside the Eurozone who can buy more for less, while the dollar remains stronger against the euro.
The sudden urgency to acquire 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.
By the numbers, 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 EU 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. Rising property prices in China’s big cities are an additional factor. In Beijing, 90 sq.m. The apartment can cost well over 1 million euros, which exceeds the threshold of 250,000 euros (or now in some cases 500,00 euros) for real estate purchases in Greece.
Concerns about the program
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. The concerns were also echoed by Prime Minister Kyriakos Mitsotakis, as it was established that the properties had to remain affordable for the citizens of Greece. The EU 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.”