Southern Europe’s cash-strapped governments are wooing wealthy home buyers from overseas by offering so-called golden visas to purchasers of high-end properties. Portugal, Greece, and Cyprus are offering temporary-residency permits to foreign investors, and Spain is about to kick off its program. The main targets are wealthy Chinese, who have been snapping up properties from Vancouver to London as Beijing tightens controls on real estate speculation on the mainland. Luis Hortelão, a broker with Re/Max in Lisbon, says his Chinese clients “know exactly what they want: a modern property to rent out during their absence and a visa to travel in Europe.”
In Portugal buyers must pay a minimum of €500,000 ($670,000) for a property to be eligible for a five-year residency permit. A total of 102 visas has been granted since the program began last year, according to the Portuguese Immigration and Borders Service, mostly to Chinese buyers. Edmund Zhao, a real estate developer from Hangzhou in eastern China, expects to receive his permit any day now after paying €700,000 for an apartment in the resort town of Cascais. Zhao must spend at least seven days in Portugal during the first year and 14 days every two years thereafter. His visa will also let him travel freely through the Schengen Area, made up of 26 European countries that have abolished immigration controls at their borders. “I want to move there with my wife and parents as soon as possible,” says Zhao, 38, who wants to send his future children to European schools.
Searches for Portuguese properties on Juwai.com, a Chinese real estate website aimed at international home buyers, rose more than threefold from January through April, says Andrew Taylor, its co-chief executive officer. Home prices in Portugal are less expensive than in some parts of China; €300,000 buys a 2,000-square-foot villa facing the sea, according to Wang Ning, a manager in the international property department at SouFun Holdings (SFUN), owner of China’s biggest real estate website. That amount buys a 730-square-foot apartment in central Shanghai.
In Spain, where a decade-long property boom has collapsed and sent home prices down about 30 percent, lawmakers are set to pass a measure that will let foreign investors apply for renewable two-year residence permits if they pay at least €500,000 for a property. Pia Arrieta Morales, a director at Christie’s International affiliate DM Properties in the resort town of Marbella, says brokers in Spain received a flood of inquiries when the plan was announced last year.
Cyprus is already “booming with Chinese investors,” says Nikolas Michalias, a local real estate appraiser at G&P Lazarou who spends half the year in China promoting golden visas tied to real estate investments. “Every day there are more than 20 Chinese nationals landing in Cyprus to search for property.”
Greece, which introduced its golden visa in April, has seen a much more muted response, even though Prime Minister Antonis Samaras personally pitched the program during a state visit to China this spring. The first five-year residency permit was awarded last month to a Chinese man, the Greek newspaper Kathimerini reported on Aug. 13. “The visa legislation in Greece is still very recent and has so far had very little impact on the real estate market,” says Ioanna Plakokefalou, general manager at Hellenic Realty in Athens. She says that while her agency has fielded some inquiries from Chinese as well as Russian investors, turning leads into sales “will depend on the political and economic situation” in Greece.