When we read about financial headwinds, soaring inflation due to energy price rises and a looming recession on the horizon, it’s worth noting that not all international markets are in turmoil.
Greece and Portugal have cut their government deficits by more than half and are less exposed than most of Europe to gas supply shocks emanating from Russia. Greece is getting a boost from a revival in foreign investment — and in tourism, which Covid had cut from 20 to 15% of its gross domestic product. Less than 10% of bank loans are non-performing, down from 50% during the crisis.
Now growing at more than 4%, with inflation coming down fast, Greece is enjoying one of the region’s healthiest recoveries. Portugal is in a similar place. It is wisely investing support funds from the EU and reforming one of the continent’s most excessively generous pension systems. Perhaps not coincidentally, the best performing stock market in the developed world this year is Lisbon’s. These countries have also been two of the most successful in Europe at developing their Golden Visa schemes attracting a wave of wealthy new émigrés
A Golden Visa refers to the immigration programme which allows wealthy individuals to get a residence permit, or even citizenship, in another country simply by purchasing a property or making a relatively large investment or donation. Different countries have different investment options, which range from $250,000 to millions.
If you make the required investment and apply for a Golden Visa, you and your family members will become legal residents of that country. You can live there, go to school and get access to healthcare, as well as many other benefits afforded to residents.
Portugal is now regarded as premium tourism and real estate location, as well as one of the leading EU countries for research and new tech. The growth in housing and rental prices, the soar in tourist numbers complemented by a stable political and social environment, a modern education system, a highly skilled and English-fluent labour force and an excellent quality of life.
Portugal occupies the sixth position in the ranking of countries with the highest percentage of women entrepreneurs, ahead of countries such as Spain, Italy or Ireland. Women are making their way to the top of the business ladder, and investment migration can help them take their success to the global stage.
Residential properties in the most popular areas such as Lisbon or Porto no longer qualify for Golden Visa in a bid to support local investment. However, commercial properties still qualify, resulting in rising global demand. Both residential and commercial units in the islands of Madeira and Azores also still qualify for Golden Visa.
According to JLL Portugal, one of our member firms that is well versed in Golden Visa investment opportunities, real estate in Madeira Island has recorded capital appreciation of more than 7% annually, and being a tourist hotspot, it has great potential for return on rentals. Portugal also offers the added benefit of a coveted European passport after five years of residency.
Greece recently announced it will double the minimum required amount of investment for the purchase of a Golden Visa property from €250,000 to €500,000. In this way, an attempt will be made to increase the available stock of real estate for purchase by local buyers. However, the appetite for an extended summer in the southern Aegean is far from over for international investors, and Greek investment tourism is heading for a bumper year.
Helped by the country’s strict management of the pandemic (and adequately staffed airports), income from international tourism is predicted to exceed 2019’s record-breaking levels, with British and Germans having spent more there in the first six months of 2022 than in the same period of 2019.
While many visitors are flocking to the hedonistic Mykonos or the shores of the pin-up Santorini, their neighbour Paros has been quietly attracting those who prefer to escape the crowds — and the high prices. They are also building a new smart-city, The Ellinikon, on the Athenian coast, expecting to attract 1 million tourists per year.
There are other EU countries offering similar schemes including Italy, Cyprus, Latvia and Luxembourg and more than 20 territories around the world from Hong Kong to Australia. It will be interesting to see if they can balance the global investment potential with a strong local economy in the way Greece and Portugal have managed – helped not least by their stunning islands, natural landscapes and wild beaches.
*Chris Dietz is President of Global Operations at Leading Real Estate Companies of the World