The number of holders of residence permits under the residence permit scheme has decreased by 544 «golden visa» program» at the end of the first half of 2022.
In particular, based on the data of Ministry of Immigration and Asylum, licensees at the end of June had fallen to 9,075, down from 9,619 at the end of January this year, the first time this has happened since the launch of the scheme in mid-2014. A total of 1,035 new licenses were issued during 2021, up 10.3% from 2020, with the total number reaching 9,619 licenses at the end of January 2022.
According to officials of the purchase of real estate, this trend is due to the fact that some of the holders of the first years' licences chose not to renew them once the five-year validity period was completed, either because they preferred to obtain a licence in another country or because they no longer needed it, or because they preferred to resell the property they had bought in order to capitalise any capital gains.
Like says Mr. Alexandros Risvas, head of the law firm Risvas and Partners, which specializes in the field of investment migration programs, «many foreign investors, who invested in the Greek real estate market in 2017 and 2018, are now choosing to transfer their property in order to capitalize on the capital gains that have been created. In some cases of high demand properties, the gain is very significant.» For example, a Turkish investor who had bought a property on Solonos Street in Kolonaki in 2017 for a sum of 260,000 euros, recently sold it for almost double that amount.
Based on Bank of Greece data, since the first quarter of 2018, when the housing market recovery started, and until this year's first quarter, house sales prices in Attica have increased by almost 40% on average, while in several areas the increases are even higher. This is particularly true in the areas where investors of the «golden visa» program were located, such as the center of Athens and the southern suburbs. In Attica, house price growth in the first quarter of this year amounted to 9.7% year-on-year, while overall in 2021 the increase reached 9.4%, compared to increases of 7.8% in 2020 and 10.6% in 2019.
According to the analysis of the data of the Ministry of Justice, the Commission's analysis of the data shows that. According to the Migration and Asylum analysis, there are significant reductions in the number of permits, especially among Chinese, Russian and Turkish investors, i.e. the three most mobile groups/countries to date. Specifically, the number of Chinese residence permit holders fell at the end of the first half of the year to 5,949, down from 6,391 at the end of January, a decrease of 442 permits, or -7%. In essence, that is, the rate of new permit issuance was significantly lower than the number of permits that were not renewed, indicative of the pace of Chinese exit from the property market. According to Mr. Risva, many Chinese investors are now avoiding acquiring real estate in Greece, due to the significant rise in prices, and are choosing to secure a residence permit by depositing 400,000 euros in a domestic bank's term account, within the relevant institutional framework.
Correspondingly, Russian investors have decreased by 168, or -38%. In fact, this number will decrease even further in the coming months, as since Russia's invasion of Ukraine, Russian nationals have been banned from obtaining residence permits, as well as from renewing previous residence permits. As for Turkish investors, the number of permits to them has been reduced to 587 today, down from 619 at the end of January.
Interest from the British after Brexit
At the same time that a portion of investors choose to sell their properties and not renew their residence permit, the replacement rate (with new ones) of investors who choose to disinvest and move to other markets - countries that also «run» «golden visa» programs - is still low. However, as Rishvas notes, this is beginning to diversify due to the increased flow of investors from the UK and the US.
It is noteworthy that this year 111 new permits have already been registered for investors from Great Britain. These are the first «arrivals» after the country's withdrawal from the European Union and while a number of companies dealing with investment migration, such as the British Astons, had ranked Greece among the top choices for British investors, due to the fact that it is an EU member state, has significant investment options and at the same time the lowest threshold for securing a residence permit, with only 250,000 euros.
Apart from British investors, who seem to have started moving towards Greece, Mr. Risvas stresses that this year there has been increased interest from countries such as Taiwan, India, Lebanon and Iran. Most of them are seeking investment «shelter» and a way out in EU countries such as Greece, either for purely investment reasons (i.e. they believe there are opportunities for property acquisition) or because they are in countries with significant economic or political destabilisation. For example, in Taiwan, tensions with China have increased in recent months, also due to the US involvement. Similarly, in Lebanon and Iran, the significant depreciation of the local currency has increased interest in re-investing capital in third countries, such as Greece, which also offers a residence permit and therefore free movement within the EU. Similarly, in the case of India, the increased demand is also due to Brexit, as most of the interested investors are Indians coming from the UK rather than from India itself.
It is worth noting that during the first quarter of this year, according to Bank of Greece data, foreign capital inflows for the acquisition of real estate in Greece amounted to 374 million euros, an increase of 74.8% compared to the first quarter of last year, when foreign capital did not exceed 214 million euros.
In 2021, EUR 1.17 billion had been invested, a performance of 34.5% higher than the EUR 875 million of foreign investment in 2020. It is estimated that in 2021 the golden visa programme was responsible for around 25% of foreign investment, with the volume of acquisitions estimated to have exceeded €260 million in value. For this year, estimates remain optimistic, both due to the increased value of properties acquired and the gradual receding of the pandemic, which has allowed greater freedom of movement, especially for third country nationals.
