Reuters) – When Edward Hu bought a holiday home in Portugal’s most popular tourist spot in September, the Chinese agricultural entrepreneur got a Europe-wide family travel permit thrown in for as long as he owns it.
“It’s one of the biggest advantages of investing in Portugal,” says Hu, 33, from Chengdu in southwest China, who paid 560,000 euros ($750,700) for a semi-detached property near the beach in the southern Algarve.
The beaches were once enough to lure buyers to southern Europe. A shattering economic crisis later, Spain and Portugal are trying to resurrect their moribund property markets by offering “golden” residence permits to home buyers from outside the European Union.
Buyers from China, Russia, the Middle East or elsewhere who spend at least 500,000 euros on real estate in either country get a permit that lets them travel freely within Europe’s 26-country Schengen zone without restriction.
The incentives, along with depressed housing prices, are showing the first signs of nibbling at the huge market glut of 3 million empty homes on the Iberian peninsula.
The Portuguese government said last week that 318 permits had been issued since the programme began a year ago, bringing in 200 million euros in investment – most of it in residential property in the last few months – and expected it to reach more than 300 million euros by December. That would exceed an estimated 250 million euros invested in all real estate in Portugal last year according to Cushman&Wakefield consultants.
“There’s a growing interest in the golden visa programme, and a lot more of it materialising in actual deals than before,” said Maria Empis, a consultant at Jones Lang LaSalle real estate firm. Last month it sold a large commercial property in downtown Lisbon to a private Chinese investor seeking the permit.
Pine Cliffs Resort in the Algarve offers beachside apartments from 780,000 euros, stretching to villas for over 4.5 million. Sales director Karin Van Den Hemel says the number of inquiries about properties has increased substantially, particularly from those seeking a golden visa.
Spain, where the property market was bloated by a pre-2008 construction boom that turned to a 35 percent price crash, introduced a scheme similar to Portugal’s last month.
“The prime areas are Barcelona, as the city appeals to business people, and resorts like Marbella,” says Christian de Meillac, who is in charge of Iberia for real estate agents Knight Frank. “What’s also promising is that quite a few are buying above the minimum limit.”
Greece has also followed Portugal’s example this year, offering similar visas on 250,000 euros in property purchases, while Malta offers citizenship with investment of 650,000 euros.