Investment for visa schemes driving prestige property development
EU countries offering various investor residency schemes experience strong demand for premium property
The number of Non-EU expats applying for EU residency through various golden visa programmes made available by EU member states has been on the rise.
Cyprus, Austria, Malta, Spain, Greece, Belgium, France, the UK, Portugal and other EU countries offer programmes that enable foreign investors to obtain EU residency in return for significant investment.
Many of these programmes require investments into property with the prices varying between €250,000 and several million.
Consequently, quite a few countries are seeing increased property market activity with more buyers coming in and developers specially targeting residency buyers.
In Greece, for instance, capital inflows for property purchases from abroad have risen by a staggering 86.5% to €503 million last year. The visa programme accounts for roughly half of it.
A minimum €250,000 of investment in Greek property allows a non-EU citizen to apply for a Golden Visa. With the price tag so low and the fact that the visa entitles the owner to travel throughout the EU, its popularity is on the rise.
Since 2013, when the program was launched, Greece has issued around 2,200 of these visas to the investors and 2,800 to their family members.
Portugal is also seeing an increase in numbers of foreign buyers, who, encouraged by the Golden Visa rule and the non-habitual residence programme, have been buying up properties across the country.
According to The Portugal News, after a decade of stagnation house prices in the country have recorded their biggest increase in 26 years. The cost of buying a house in Portugal has risen by 14.2% in the space of just one year. Rental prices have also shot up to new highs.
The Bank of Portugal reports that overall foreign investment in real estate in the country in 2017 represented 80% of all transactions.
However, the most popular investment for residency scheme across the world is the Cyprus’ Golden Visa. Cyprus offer permanent residency to those investors acquiring property worth €300,000 or over, and full Cypriot citizenship to property buyers ready to part with minimum €2.5m.
Despite a hefty price tag, Cyprus Golden Visa citizenship is growing in popularity. Cypriot authorities even had to cap at 700 the number of passports it grants to wealthy foreigners each year due to the heavy criticism of what was termed “EU passport sales”.
Cyprus’ developers have seized the opportunity and are actively targeting wealthy investors ready to part with a couple of million in return for an EU passport.
The coastal city of Limassol is currently undergoing a high-end construction boom with investors snapping up prime properties off-plan long before the completion dates.
Cyprus developers Cybarco’s Limassol project – the Trilogy towers (3 residential apartment blocks of 38 storeys each) are due to be completed in 2023. However, the developers have already secured €40m in sales and reservations, according to the Cybarco.
Cyprus citizenship and residency schemes are undoubtedly profitable. Up to last year they contributed €4bn into the economy. In March, some 51% of all property sales contracts in Cyprus involved non-Cypriot buyers.
As high demand pushes prices up, last year, house prices in Cyprus rose by 33% and rents in Limassol have risen by about 25% over the past two years.