ISRAELIS TOO IN THE TOP 10 FOR GOLDEN VISA
The Chinese maintain their top position in the program, followed by the Turks. There has been an increase in property purchases from the USA and the UK. Demand has slowed down, and investors are turning towards the western suburbs and Piraeus after the changes implemented on August 1st.
The Chinese maintain their supremacy in the market, with the British and Americans increasing their shares, and Israelis representing the new… entrance into the top 10 nationalities for property purchases by third-party investors under the “Golden Visa” program over the last 12 months. Meanwhile, following changes that have been in effect for two months now, starting from August 1st, there is a noticeable shift, especially among prospective buyers seeking properties in the capital, towards Piraeus and the western suburbs. In these areas, the minimum purchase threshold for residence permit issuance remains at €250,000, in contrast to central Athens, the southern, and northern suburbs, where the minimum purchase threshold has been raised to €500,000.
Decreased demand has been evident since August 1st.
Another market trend in the last two months has to do with the pace of demand, although it is not yet clear if this is due to the rally observed up to July 31st when investors rushed to capitalize on the low €250,000 threshold, especially in Athens. It is worth noting that as of August 1st, 2023, the minimum investment threshold doubled to €500,000 in the Central, Southern, and Northern Attica regions, as well as in Mykonos, Santorini, and the Municipality of Thessaloniki. This change has made the issuance of residence permits for third-country investors seeking to acquire properties in these areas more expensive.
“We experienced a significant wave of investors before the August 1st milestone, and the real effects of the upward shift in the market threshold will become evident in a timeframe of 6 to 8 months from today,” stated Vaggelis Kteniadis, the president of V² DEVELOPMENT, a real estate development company. He is among the major players in the domestic real estate market, specializing since 2013, when the Golden Visa program was introduced. As essentially the second generation in the field of residential development, with nearly 7,500 purchase-sale contracts since the ’60s when Mr. Kteniadis Sr. began, V² DEVELOPMENT has focused over the last decade on a clientele comprised of more than 90%-95% foreign nationals. A telling example is that at this moment, they manage approximately 650 apartments for foreign buyers, which they rent on their behalf. Out of these properties, a percentage close to 40% is rented to foreigners, which has significantly increased compared to the previous 15%.
Price increases of up to 40% have been observed.
In practice, following the changes, the market is experiencing, on one hand, a slowdown in demand and, on the other hand, a shift away from Athens, which is the primary focus for Golden Visa demand. Investors are turning towards other, more affordable areas that have seen an upturn in prices, sometimes not entirely justified. “Especially for the capital region, we have noticed price increases that can reach up to 40% compared to the recent past, in areas like Piraeus and the western suburbs, where the threshold has remained at €250,000,” commented Mr. Kteniadis.
“Prospective buyers from third countries, whether interested for personal use or for rental purposes, consistently seek properties within urban areas. There has been no – nor do we see any – interest in the regions. Ultimately, properties within urban areas gather the highest demand because they have nearby infrastructure for daily life, shopping, schools, etc., and neighborhoods in Piraeus are on a significant rise due to their easy access to the coastline.”
The rationale behind the government’s decision to increase the threshold to €500,000 in high-demand areas includes the fact that the rise of the Golden Visa played a role in increasing rents and property prices in these areas. Additionally, the increase in the threshold aims to make homes more accessible for the Greek population. However, with the new regulations and the maintenance of the €250,000 threshold in the rest of Athens, an increase is recorded even in previously secondary areas, eventually driving up prices for properties that would not have exceeded €200,000-€220,000 under different circumstances.
In relation to the “geography” of the program, an additional trend that has been recorded is that in the last 12 months, there has been an increased interest from the USA and the United Kingdom, possibly due to the attractiveness of Greek property prices compared to other European markets. There is also an increase in interest from Israel. “A large percentage, over 65%, are interested from China, while interest from Turkey has decreased. Lebanon and Egypt are also among the key markets. There is also significant interest from the USA and the United Kingdom; however, these nationalities are not pursuing the Golden Visa as aggressively, as they fall under a different regime compared to other third-party investors outside the EU and can stay in Europe for 90 days per 180 days. There are also more purchases from Israel,” says the head of V² DEVELOPMENT, which currently maintains offices in Beijing, Shanghai, Ho Chi Minh City in Vietnam, Dubai, Nairobi, and will open in Tel Aviv before the end of the year.
Official data from the Ministry of Migration and Asylum confirm this fact up to August: the valid permanent investor Golden Visa permits (initial issuance) were up to 11,148 in August, compared to 9,178 a year ago, in August 2022, representing an increase of over 21%. China consistently ranks as the top nationality in August, with a 61.1% share of the total and 6,811 residence permits, followed by Turkey with 715 permits and a 6.4% share, followed by Lebanon with 561 permits and a 5% share, Iran with 3.1% and 342 residence permits, with Russia falling to fifth place with a 3% share. The United Kingdom and the USA have increased their shares to 2.9% with 318 permits and 2.2% with 240 permits, respectively, up to August 2023. A year ago, the percentages for the British were below half of the total, at 1.4%, and for Americans at 1.5%. Israelis have made a dynamic entry into the top 10 this year with a share already at 1.4% and 159 permits, ranking ninth, above Ukrainians.
Overall, the valid residence permits for permanent investors, including their family members, were 36,688 in August 2023. For the period August 2022-August 2023, the 9,974 applications for permanent investor permits (initial issuance and renewal) were analyzed as 3,208 issued, 18 rejected, and 6,748 pending. The total number of pending residence permit applications is large, reaching 23,552 at the end of August, with the majority of pending cases being from Chinese investors and their family members (71.1%), followed by Turkey (6.4%) and Lebanon. Regarding the geographical distribution across Greece, the overwhelming majority is concentrated in Attica, as expected: almost 20,000 out of the total of 23,552 pending cases are in the Attica region (specifically 19,910), followed by 952 pending applications in the regions of Crete, Macedonia-Thrace with 784, Peloponnese/Western Greece and the Ionian Islands with 763, and so on.