Demand for Greek golden visa drops due to the lockdown

Are you planning to acquire a legal residency permit in Europe? You can apply for a golden visa to a European country thus acquiring the right of abode there. The two most popular options are the immigration programs run by Greece and Portugal. It has to be noted, however, that while the COVID-19 pandemic has not significantly affected the Portuguese golden visa program, the Greek program has become less attractive for foreign investors. Please read on to learn more about the subject.

Relocating to the European Union is easy if you have enough money for that. With the support of professional immigration consultants and investment specialists, you can achieve this goal without too much hassle and within a reasonable timeframe.

Residence permit in Greece

Probably, the most inviting opportunity to acquire legal residence in the EU is by purchasing some real estate there. This is often referred to as a ‘golden visa’ opportunity. At the same time, before making any investment, you have to make sure that the prospective results are going to be satisfactory for you.

If we look at the most popular golden visa programs, we will see that the Portuguese program may prove more attractive in 2021 in comparison to the Greek one. Here is why.

Has the pandemic put the Greek golden visa out of play?

According to the information provided by the Greek immigration authorities, between January and September of 202, only 368 residence permits were issued to foreigners buying real property in the country. This is partially attributable to the fact that issuance of residence permits was temporarily suspended due to the COVID-19 situation.

It has to be admitted that Brussels officials regularly express criticism of the Greek golden visa program warning that it can be used by criminals to penetrate into the EU. However, the criticism has not been the reason for the drop in numbers: it has been the spread of the coronavirus.

The total number of foreign nationals who have made use of this opportunity to obtain legal residence in the EU since the program was launched is 7,903. In 2019, the Greek authorities granted 3,428 residence permits to foreign investors who bought property in the country each piece of which is worth 250,000 euros or more.

The applicants for residence by investment put 857,000,000 euros into real property located in Greece in 2019 alone. According to the statistics published by the Central Bank of Greece, the total amount of foreign investments into Greek real property was 1.45 billion euros in 2019.

Currently, we are witnessing a decrease in the number of people applying for Greek golden visas. There are multiple various reasons for that including lowered incomes and travel restrictions imposed all over the world.

Greece was among the first countries to suspend the golden visa program due to the coronavirus pandemic and it also was among the first to relaunch it. In June this year, the Greek authorities announced that the program was operational again.

According to the Greek officials, some amendments to the golden visa program are going to be introduced. These amendments will serve to simplify the process of acquiring a legal residence permit in Greece in exchange for purchasing some real estate there.

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Demand for Greek real estate among foreign buyers is falling and so is the demand for Greek residence

The Central Bank data show that 2020 has seen the lowest demand for real property in four years. In the second quarter of this year, the demand fell by 60% in comparison to the same period of the previous year. While 140,600,000-euro worth of property was sold in this period in 2020, 344,000,000-euro worth of property was sold in the same period in 2019.

This is the worst result since the second quarter of 2017. Beginning the summer of that year, the demand started to grow and it grew steadily until recently. In the third quarter of 2017, 170,000,000-euro worth of property was sold and that marked the beginning of a ‘golden era’ for the local property market.

The coronavirus pandemic started in China at the beginning of 2020. Now, the Chinese are the main investors in foreign property and therefore, the demand for Greek golden visas started falling sharply in the first quarter of 2020.

The inflow of capital dropped from 419,300,000 euros in the last quarter of 2019 to 230,700,000 euros in the first quarter of 2020. In other words, there was a 41% decline in the sales on an annualized rate.  

The first half of 2020 saw a 49.5% decline in the demand for Greek real property on the part of foreign investors in comparison to the demand in the first half of the previous year (371,300,000-euro worth of property sold this year vs. 736,000,000-euro worth of property sold last year).

Analysts predict that the second half of this year is going to show even worse results. The coronavirus pandemic has not been defeated yet and the second wave is affecting the whole world. In this light, the hopes for fast economy restoration are slender, which makes foreign investors hesitant. Those who planned to apply for a Greek golden visa are now putting off the purchase of real estate in the country.

There are two main reasons why foreigners buy real estate in Greece:

  • First, people buy property to generate a passive income by letting it on a lease;
  • Second, they buy property to acquire legal residence in Greece via the golden visa program.

The coronavirus pandemic has had a notable negative effect on both types of buyers.

Ernst & Young report: the Greek golden visa has a huge potential

According to the study of Greece investment appeal in 2020 conducted by Ernst & Young consulting agency, a stable political situation and progressive climate change policies make Greece attractive in the eyes of domestic and foreign investors. The latter include those people who wish to acquire legal residence in the country by purchasing real estate there.

The Greek division of Ernst & Young reports that almost two thirds of investors (65%) consider the political stability in the country an important factor in its investment appeal. 56% of the respondents give a positive assessment to the Greek sustainable development efforts. They are especially impressed by the large amount of investments going to multiple renewable energy development projects.

The quality of life, the telecommunication infrastructure, and the human capital are three more advantages found in Greece. However, the study also shows that the Government of the country has to take steps towards innovations support and the development of hi-tech industries to make the Greek economy more competitive in the world market. In addition, the authorities should pay more attention to the possibilities to lower the taxes, improve the judicial system, and raise the level of education in Greece.

Ernst & Young study shows that 67% of the investors would be more willing to put money in Greece if the abovementioned issues were solved. The figure is 83% for the investors already located in Greece.

Over two thirds (69%) of the respondents expect that the investment attractiveness of Greece is going to grow within the next three years. While 50% of the respondents deemed Greek investment policies attractive a year before, 62% think so now.

28% of the respondents declared an invention to invest into Greece within the next 12 months. This is the largest percentage among all European countries where Ernst & Young conducted research.  

At this same time, it should be noted that the information about the investment intentions has been obtained almost exclusively from businesses located in Greece. Only 5% of foreign respondents have expressed a desire to invest in the country.

Professional assistance to those planning to acquire legal residence in Europe by purchasing real estate there

When buying a house, you have to take a great number of various little details into consideration. When buying a house in a foreign country, you have to face new purchase registration rules, new property-related legislation, new taxation requirements, and so on. But you have to buy a house if you want to acquire a legal residence permit in a European country.

The experts of InternationalWealth portal will be delighted to give you a free consultation on buying real property in Greece. Besides, we can advise on many other issues related to immigration, asset protection, business company formation, tax planning, and keeping the books in a foreign country.  

Please contact us in any way that is convenient for you (email, telephone, live chat) and apply for our assistance. We are here to help you improve your living standards!  

Who is eligible for a European golden visa?

The criteria differ a bit from one country to another. Generally, the applicant shall be over 18 years of age, shall have a medical insurance policy valid in the target country, and have a clean criminal record. The central condition, however, is being able to make the investment in the required amount.

How much does a Greek golden visa cost?

In order to qualify for a Greek golden visa you have to purchase real property in the country that is worth 250,000 euros or more. Alternatively, you can make a ten-year rent agreement with the contract price amounting to the sum specified above.

Greece or Cyprus? What country should I apply for a golden visa to?

Both European countries offer legal opportunities to acquire their golden visas. Greece requires 250,000 euros as the investment amount, which is a bit less that Cyprus charges (300,000 euros). In both countries, you can count on acquiring full citizenship by naturalization. However, you will have to reside there for at least seven years before you can apply for citizenship.

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