Current status : Immigration-related investment in Greece in Q3 2021

current status immigration related investment in greece in 2021

As 2022 draws to a close, real estate investment related to immigration and national integration is changing in Greece, and to this are correlated several contextual parameters acting as domino effects… and to the rhythm of the Golden Visa.


The Golden Visa

The first effect is a consequence of the decision to legislate an increase in the cost of the Golden Visa by the current government. The announcement of a doubling of the amount from 250,000 euros to 500,000 euros is expected in Q1 2023 in the major cities.  This announcement has had the effect of increasing the demand for smaller property purchases by third country individuals:

– Tranche 1: flats priced between 70,000 and 140,000 euros

– Tranche 2: properties between 140,000 and 250,000 euros

Indeed, in order to invest the 500,000 euros to obtain the Golden Visa, buyers from third countries (Libanon, Israel, etc.) are interested also to resell and make profits in the future. Consequently, they have set their sights on properties (tranche 1 & 2) and are investing heavily by making multiple purchases at the end of the year. As a result, an increase in the price of small investment amounts overvalued between 20% and 30% on the basis of properties priced between 50,000 and 70,000 euros in the 1st quarter of 2020. The same increase in value can be seen for the properties in tranche 2 which, although not worth 250,000 euros, have reached the psychological price of 250,000 euros.

This phenomenon has created a pledge effect of properties without any concrete value as a result (properties that were worth 70,000 euros in 2020 and are now worth 84,000 euros have gained no real value).

But more specifically, the matter is that the properties currently for sale are those that “remain” on the market and which originally were not easy to sell because of defects related to square meters, construction, or because they were confiscated or mortgaged properties.


More difficulties and risks for buyers

Regarding the third cascade effect, this reality impacts buyers who are now experiencing more difficulties at the legal level to buy (formal defects and procedural defects are becoming recurrent) and in the same way impacts the seller-owners who are facing immediate and future problems. Immediate, because their property is not currently saleable, and needs to be fixed and sold. Most of the owners of these properties do not have the necessary funds to be able to sell in the best conditions. It should be understood that if the property sold is not in conformity, legal risks (legal proceedings) are to be expected in the years to come (at the time of a resale by the new owner, for example), with the financial risk that it represents (for the former owner and the parties involved in the sale process).

The third effect naturally falls on professionals such as legal representatives (lawyers and notaries), administrative representatives (administrative authorities), technical representatives (engineers, workers) who face and will face more difficulties in collaborating in a context of increasing uncertainty (sales that do not go through or are delayed).

In addition to the difficulties associated with the depletion of these professions, which are struggling to work properly, buyers are exposing themselves to more risks on the skills they are hiring. This leads to a depletion of the service they are able to expect at the time of their investment. The profession of estate agents as intermediaries between each of the professions should be tempted to sell at any price to acquire their fees, which will irreparably weaken each of the professions with which they are linked, in addition to the potential buyer.


Impacts on the local real estate market and nationals

Eventually, this micro-context is complemented by the stable real estate market situation:

– A supply and demand that is increasing in all European cities (place of life where full employment is supposed to exist, existing and accessible infrastructures, on a larger scale, political and monetary stability);

– A market that evolves and indexes itself to socio-economic difficulties such as access to housing, employment, or difficulties in accessing health care and transport);

– Measures that are intensifying since the explosion of high intensity conflicts (global political and security instability outside Europe linked to wars).

And because the rule is that everything that is scarce is expensive, as a final consequence of all the effects that follow, the current situation will make real estate more and more valuable, whose the last actor is the buyer, not ready to see a decrease in the price of the real estate market in Greece, going along financial and practical difficulties to invest in the time.


Emilie LE BON
Jurist in International Law & Economics
Theodorou Law Office & Associates
All reproduction prohibited

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