How Golden Visa affects the Greek housing market

It is a fact that in recent months the buying and selling of houses has been moving at high levels. And this is because the grace period for obtaining a "Golden Visa" at low prices in the center of Athens, in the northern and southern suburbs, in Mykonos, in Santorini and in the Municipality of Thessaloniki, has been extended until July 31, 2023.

The golden visa

After August 1st, unless a new extension is granted, the minimum investment limit in the central, southern and northern sectors of Attica, as well as in Mykonos, Santorini and the municipality of Thessaloniki, will be doubled to 500,000 euros.

This means that all the areas of the southern suburbs, namely the municipalities of Moschato - Tavros, Kallithea, Palaio Faliro, Nea Smyrni, Ellinikon - Argyroupolis, Agios Dimitrios, Alimos and Glyfada, are "rising in price".

The same will happen in the center of Athens (municipalities of Athens, Byron, Galatsi, Dafni - Ymitto, Zografou, Ilioupoli, Kaisariani and Philadelphia - Chalkidona), as well as in all the northern suburbs, i.e. in the municipalities of Agia Paraskevi, Amarousi, Vrilisia, Heraklion, Kifissia, Lykovrysi - Pefki, Metamorfosi, Nea Ionia, Papago - Cholargos, Penteli, Filothei - Psychiko and Chalandri.

In all other areas where the threshold remains at €250,000, investors will continue to be able to purchase more than one property in order to reach the minimum investment threshold.

How will it affect the market?

Economist and tax expert Leonidas Tsagaris spoke about the golden visa and how it affects the housing market.

The issue of housing is not just about the golden visa, it is a sub-issue of this case. The golden visa is a tax incentive given by the government for the past four years to enable one to have a five-year residence permit in the country renewable if some investment is made in Greece, Mr. Tsagaris told public broadcaster ERT.

The limits were raised mainly in the prefecture of Attica, prefecture of Thessaloniki and some highly advertised destinations like Mykonos and Santorini from 250,000 which was the limit to 500,000 euros.

This resulted, he continued, in a serious flow of non-Greeks in this direction and this has allegedly affected the prices in the real estate market and in terms of the possibility of finding someone to rent but also the possibility of finding someone to buy. The prices have gone up from a little to a lot.

At the same time, he noted that "this combined with the ability to rent short-term through the special platforms of the Ministry of Finance has created a pressure on the housing market that does not facilitate young people and young families and has raised the tariff for others as well. Here we approach this issue from an economic point of view. After all, the announcement of the new direction of the government's economic policy is a specific issue, the combination of tax and social policy".

Already, he continues, it is expected to announce the doubling of residence beneficiaries, from the 10,000 beneficiaries based on the criteria, to 20,000 beneficiaries.

He noted that there will be other measures for large families in order to create a way out in this direction. Let's not forget that the previous ten years of memoranda shut down the real estate sector, there was a serious recession in this sector, therefore the supply of new homes decreased. This results is the price pressure we are seeing today.

"Let's hope that normality will soon be restored in this market, also through an increase in housing supply. To build a house as we know it takes at least two years of construction time, plus the cost, plus the difficulty many builders have in finding qualified staff.

Because in all the previous memoranda years, in the period from 2010 to 2020, too many people either left for abroad or moved to other jobs, changed specialization, etc. This resulted in serious pressure on the housing market."