According to this report, when Air China’s CA863 flight from Beijing lands in Athens, black luxury buses and interpreters are waiting at the terminal for some passengers. The trip is not for the Acropolis, but for one of the many real estate offices and law offices specializing in Chinese clients in order to invest in the housing market in Greece, it is noted. Travellers are interested in an apartment in Athens or one of the islands – and the residence permit valid for at least five years that they can acquire by buying property. Practice is controversial, but profitable: EU countries grant visas to investors from third countries who invest money in real estate. In this way, they attract billions of investment. As a result, the apartments become inaccessible to locals in many areas. This is not the only reason why so-called ‘gold visas’ are increasingly criticized. They allow free travel throughout the Schengen area. Critics say this turns the right to stay in the EU into a luxury kind for the rich who can be bought. This practice also favours money laundering. Therefore, many EU countries have stopped granting visas to property investors in recent years. The Athens government insists on its programme – and now reports a new record: last year, it issued 4231 residence permits to property buyers from non-EU countries. That was almost twice as many as last year. Greece introduced the program in 2013, at the peak of the public debt crisis. Its aim was to revive the real estate market, which had been particularly affected by the crisis. Since the start of the programme eleven years ago, Greece has issued 22,298 residence permits. Investors brought the country about 7 billion euros. The Chinese are in first place in issuing a visa with 61%, followed by the Turks with 6%, Lebanese, Iranian and British. But the business model is becoming increasingly critical. Transparency International is calling for an end to the Golden Visa programmes. They have “turned the right to stay in the EU into a luxury commodity that anyone who has enough money can buy,” criticises the non-profit organization, which fights corruption worldwide. The Commission also sees ‘risks in terms of security, money laundering, tax evasion and corruption’ with gold visas. This has implications for the Union as a whole, ‘as the residence permit confers the right of free movement within the Schengen area’, a representative of the Commission explained in response to a question from Handelsblatt. But Brussels can do nothing more than warn. The Commission’s hands are tied as the rules of residence are subject to national legislation. The programs are also controversial because of the effects they cause on the real estate and housing market. Last year, the Golden Visa program already accounted for seven percent of all real estate transactions in Greece. According to calculations by the Greek central bank, the prices of the apartments in Attica have increased by 71% since 2017. Rents have increased up to 56% over the last five years. According to a study, there is currently a shortage of 212,000 apartments in Greece. The visa programme worsens the situation, because many foreign investors promote their newly acquired properties to tourists. In Greece, about 170,000 apartments are currently rented at gates such as Airbnb on a short-term basis. There is a shortage of them in the normal housing market. Therefore, average employees find it difficult to find affordable housing. Portugal withdraws Therefore, many EU countries have reduced significantly or have completely cancelled the sale of gold visas. At the end of last year, Portugal cancelled the possibility of obtaining a visa by purchasing a property. Residence permits are now only available for investments in Portuguese funds or for donations to cultural projects. Previously, third-country citizens who invested at least half a million euros in Portuguese real estate could obtain a residence permit. The beneficiaries came mainly from China, Brazil and the USA. 7.3 billion euros flowed into the country this way. As a result, property prices in large cities such as Lisbon and Porto have increased so sharply in recent years that the Portuguese with low wages can no longer afford to rent, let alone acquire property. Many of them live outside the city centres and have to take long routes with poorly developed public transport to go to work in the city centre. According to data from the Bloomberg news agency, residential properties in Lisbon are now more expensive than in Milan, Madrid or Berlin. After the abolition of the right to choose real estate in Portugal, experts now expect a race in neighbouring Spain. That is because the government there has insisted so far on the golden visa. The minimum investment amount is half a million euros. However, the question is how long will the program continue to exist. The left Sumar party union, which forms Spain’s minority government with the Socialists, wants to abolish the golden visa. The reason is their impact on real estate prices, which exceed the economic potential of many locals and Spain. Greek government increases admission tickets Left opposition parties in Greece are also calling for the end of the business model, according to the same report. But there’s a lot of resistance to his abolition. This is due to the fact that around the Golden Visa a whole service industry has been developed in recent years by specialized brokers, lawyers, agencies and real estate manufacturers. However, the government cannot ignore the negative effects on the housing market. Prime Minister Kyriakos Mitsotakis sees the program as “an important investment boost for the economy”, but wants to take “measures to protect the local market”. The minimum amount for investments with Golden Visa in Athens and other highly sought-after areas is to be increased from 500,000 to 800,000 euros. The intention behind this is to reduce inflationary pressures on medium and lower price-class properties. However, market observers are now awaiting a new wave of foreign Golden Visa applicants before the increases enter into force.
Handelsblatt: How Rich Chinese Raise Rents in Greece
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