Portugal lures Chinese investment with travel permit offer
Chinese among buyers helping boost home sales, drawn by travel permit for 26 nations
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 southwestern China, who paid €560,000 (HK$5.68 million) 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 on real estate in either country get a permit that lets them travel freely within Europe's 26-country Schengen zone.
The incentive, 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, most of it in residential property, in the past few months. It expects it to reach more than €300 million by the end of the year. That would exceed the estimated €250 million invested in all real estate in Portugal last year.
"There's a growing interest in the golden visa programme," said Maria Empis, a consultant at Jones Lang LaSalle. Last month it sold a large commercial property in downtown Lisbon to a private Chinese investor seeking the permit.
Spain, where the property market was bloated by a pre-2008 construction boom that turned to a 35 per cent price crash, introduced a scheme similar to Portugal's last month.
"The prime areas are Barcelona, as the city appeals to businesspeople, 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 in property purchases, while Malta offers citizenship with investment of €650,000.
The most eager customers, real estate agents and lawyers say, are Chinese and Russians, who have been flocking to Europe for their holidays for more than a decade.