Southern Europe’s cash-strapped governments are courting wealthy Chinese homebuyers, seeking to bolster their battered real estate markets by offering visas to those who purchase prime properties.
Cyprus, Greece and Portugal are providing resident permits to foreign buyers, while Spain is about to adopt a similar measure. The chance to purchase a home at depressed prices in southern Europe and gain what’s known as a golden visa is mostly being sold to Chinese investors, according to brokers.
“Property is what really attracts China’s rich,” said Nuno Durao, a founding partner at Irglux, a unit of real estate agency Fine & Country, in Cascais, Portugal. “With just half a million euros, high-net-worth Chinese investors will get a good return on their property investment and at the same time enjoy a handful of EU benefits they don’t have in China.”
Southern Europe is the latest target for rich Chinese homebuyers, who have been snapping up properties from Vancouver to London since 2010 as their wealth swells and China’s government steps up a three-year campaign to cool home prices there. Cyprus, Portugal and Greece are hot spots for the newly affluent Asians, according to SouFun Holdings Ltd., owner of China’s biggest real estate website and an organizer of overseas purchasing tours for Chinese seeking cheap properties and a chance to live in the EU.
Greece and Cyprus offer fast-track permit processes for purchases of at least 250,000 euros (US$335,000) and 300,000 euros, respectively. Portugal’s program has a minimum price of 500,000 euros.
While some wealthier European countries also grant special resident visas for investors, most require larger outlays and may not involve real estate. The U.K., for instance, grants special visas to individuals with at least 1-million pounds (US$1.6-million) to invest in the country.
“I want to move there with my wife and parents as soon as possible,” Zhao said in a telephone interview from Hangzhou, eastern China, where the 38-year-old lives with his wife. “I love it.”
Buyers from mainland China typically look for immigration opportunities in southern Europe for their families because of the drop in real estate prices, said Wang Ning, a manager in the international property department at SouFun in Beijing. Some visas allow buyers to live and travel freely within Europe’s borderless Schengen Area, made up of 26 countries from Finland in the north to Greece in the south.
Europe’s sovereign-debt crisis has also meant a depreciation of the euro, making real estate more affordable to Chinese buyers. The currency fell about 17% against China’s yuan from the beginning of 2010 through the end of July.
Searches for Portuguese properties on Juwai.com rose more than threefold from January through April, said Andrew Taylor, co-chief executive officer of the Chinese real estate website aimed at international home shoppers. Interest in Cyprus, Spain and Greece increased as much as 108% in that time, Taylor said in an e-mailed response to questions.
Cyprus is already “booming with Chinese investors,” said Nikolas Michalias, a property valuer at G&P Lazarou in Cyprus who spends half the year in China promoting golden visas tied to real estate investments. “Every day there are more than 20 Chinese nationals landing in Cyprus to search for property.”
The island nation this year followed Greece, Ireland and Portugal in requesting emergency aid from the EU and the International Monetary Fund.
Spain received “almost an immediate response” from Chinese investors when it announced the visa proposal last year, said Pia Arrieta Morales, a director at DM Properties, a Christies International affiliate in the seaside resort of Marbella.
Demand from Chinese buyers for golden visas is just beginning to surface in places like Greece, which passed its law in April. Prime Minister Antonis Samaras visited China in May and announced that non-Europeans who invest in the property market could gain the right to live in Greece.
A Chinese man became the first foreigner to benefit from the program earlier this month, Greek newspaper Kathimerini reported Aug. 13. Local real estate company BuildUp said the deal was signed on Aug. 8, and the firm is working with a Chinese company to promote Greece’s property market, according to Kathimerini.
“The visa legislation in Greece is still very recent and has so far had very little impact on the real estate market,” said Ioanna Plakokefalou, general manager at Hellenic Realty in Athens. “While we had some inquiries from Chinese and also Russian investors, their interest will depend on the political and economic situation.”
Full article: Wealthy Chinese snap up homes in Southern Europe as governments offer visas for buying (Financial Post)