The Greek Golden Visa has officially doubled the minimum real estate investment amount in selected areas of Athens, as well as Thessaloniki, Santorini, and Mykonos.
The price hike came into effect on the first day of August, and now the affected areas will require a €500,000 real estate investment rather than the €250,000 minimum that is available in the other areas.
As always in investment migration, a massive influx of applications flew in before the price hike came into effect, and now Greece is looking at €200 million in revenue per month on average for 2023.
The main purpose of Golden Visas is to attract sufficient capital to bolster a country’s economy, and to do that, they must align with the global economic landscape.
But Greece’s decision was not only motivated by inflation and a need for an update, but instead it was a carefully thought out change that addresses key areas within the Greek economy.
This piece will look at the key elements behind the Greek government’s decision and highlight why the price hike makes sense for the country.
Property prices in Greece grew 14.7% Y-o-Y between March 2022 and March 2023, a rate well above the EU average and nearly one and half times as much as fellow EU compatriots Belgium and Cyprus (7.4% and 7.7%, respectively).
Greek property inflation has been consistently growing, as the latest data follows a consistent growth trend of 11.32% in 2022 and 10.81% in 2021.
Athens, of course, has seen the highest property cost growth, as property prices increased 13.02% in 2022, cementing the Athenian housing market as the most dynamic – and expensive – in the country.
Thessaloniki witnessed the second highest average price increase during the same year at a rate of 11.07%, while the rest of the Greek cities saw an average of just 9.39%, emphasising the seriousness of the situation in Athens and Thessaloniki and the sheer amount of property sales in the two cities.
Demand VS Supply
Inflation, though, isn’t the main reason property prices are growing in Thessaloniki and, more importantly, Athens, as the supply is struggling to keep up with the demand.
This imbalance means that €250,000 is no longer a reasonable investment amount in Athens, and while the government wants to attract more investment, they want to dissipate it among other regions.
Average rents went up 35.4% Y-o-Y in Athens, which is undoubtedly good news for investors but bad news for locals looking for a place to rent. The Greek government has addressed this issue by amending the Golden Visa pricing in Athens before it becomes a major issue, like what happened in Lisbon.
This way, the government can curb the rent inflation before it gets too bad and maintain its Golden Visa in its current form rather than taking drastic measures such as those the Portuguese Government partook in.
Golden Visas don’t only bring in money through direct investment. They create jobs by encouraging developers to create new projects, and they stimulate local manufacturing, construction, logistical, legal, and accounting sectors by creating more work.
By diversifying Golden Visa investments throughout the country, the Greek government has found a way to maintain a solid level of FDI in Athens and Thessaloniki – especially since the rush of applications has now injected massive amounts of money into these cities – while also setting the path for the development of other areas and cities within Greece.
For the Greek government, raising the minimum investment amounts in Athens, Thessaloniki, Mykonos, and Santorini not only makes financial sense, but it is a stroke of genius that will allow the country to continue reaping the rewards of the Golden Visa.
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