Greece Under the New Regulations, and Which Investment is Right for You?

Greece real estate new regulations options have been updated as the Greek government has recently announced new real estate investment thresholds for its highly sought-after Golden Visa program.

These changes introduce four price tiers ranging from €250,000 to €800,000, as well as restrictions on property use. The new rules present unique opportunities for investors seeking to secure a Greek Golden Visa through real estate investment, while also taking advantage of the country’s thriving housing market.

Before diving into the specifics, it is vital to note that investors who make a 10% deposit on a Greek property before September 1st, 2024, can still qualify under the current regulations.

This article will provide information for investors who either want to apply under the new regulations or those who are not able to make a deposit before the deadline.

What are Greece Real Estate New Regulations Options by Investment Zone?

Under the new regulations, Greece will have two main investment zones:

• EUR 800,000 for properties in the Administrative Region of Attica (including Piraeus and most of the capital region), the Regional Units of Thessaloniki, Mykonos, and Santorini, as well as in islands with a population of over 3,100 inhabitants.
• EUR 400,000 for all other regions of Greece.

The entire investment must be made in a single property with a minimum area of 120m².

What Are Two Crucial Exceptions for Investors to Evade the Recent Update?

However, two crucial exceptions allow investors to qualify at a lower threshold of EUR 250,000:

• Properties converted from commercial to residential use.
• The restoration of listed buildings of historical or cultural importance.

Investors should note that properties acquired through the Golden Visa program cannot be used for short-term rentals (e.g., AirBnBs) or as registered company headquarters for properties converted from commercial to residential use.

Which Real Estate Investment Category Is Right for You?

The new legislation opens the door for more interesting investment opportunities, but it also asks investors one important question: Which investment option will you apply to?

We will break down the investment options to provide a clearer image of the real estate landscape under the Golden Visa so you can better determine which investment option suits you best.

1- Commercial to Residential Conversion

One of the most attractive options under the new regulations is the conversion of commercial properties to residential use. Investors can acquire commercial properties for EUR 250,000 and convert them to residential, regardless of the location and size of the property.

This exception presents a unique opportunity for investors to secure a Golden Visa at a lower investment threshold while also potentially benefiting from the value appreciation that comes with the conversion process.

According to recent data from the Bank of Greece, the Greek real estate market has shown remarkable resilience and growth potential. The housing market in Greece’s urban regions experienced a significant surge in prices, recording a remarkable 14.14% year-on-year growth in the second quarter of 2023.

This impressive increase followed a series of consecutive year-on-year rises, with urban house prices climbing by:

• 15.32% in Q1 2023,
• 14.75% in Q4 2022,
• 12.77% in Q3 2022,
• 11% in Q2 2022,
• 10.6% in Q1 2022.

Even when accounting for inflation, the urban housing sector still demonstratedstrong performance, with prices growing by 11.33% year-on-year in the second quarter of 2023.

Many developers have successfully completed commercial to residential conversions to qualify under the Greek Golden Visa program. Some notable examples include:

• The transformation of a former textile factory in Thessaloniki into a modern apartment complex, featuring loft-style units and communal amenities.
• The conversion of a warehouse in Piraeus into a mixed-use development, combining residential apartments with ground-floor retail space.

2- Restoration of Listed Buildings

Another appealing option for investors is the restoration of listed buildings, which are properties of historical or cultural importance. By acquiring and fully restoring or reconstructing such properties, investors can qualify for the Golden Visa at the lower EUR 250,000 threshold, regardless of the location and size of the property.

This exception not only provides a more affordable entry point for investors but also contributes to the preservation and revitalisation of Greece’s rich architectural heritage. Investors must complete the renovation by the fifth year of residency to renew their Golden Visa.

Restoring listed buildings can also offer attractive rental yields, particularly in popular tourist destinations. In Athens, for example, the average rental yield for renovated historical properties can reach up to 6%, while in other regions, such as Crete and Rhodes, yields can range from 4.5% to 5.5%.

An example of a successful restoration project includes the restoration of a 19th-century neoclassical building in Athens, converting it into luxury apartments while preserving its original facade and architectural elements.

3- EUR 800,000 Real Estate Properties

For investors with a higher budget, properties in prime locations such as the Administrative Region of Attica, Thessaloniki, Mykonos, Santorini, and islands with a population of over 3,100 inhabitants present an opportunity to acquire high-value assets.

While the investment threshold for these areas is set at EUR 800,000, the potential for capital appreciation and rental income in these popular destinations can be significant.

In 2022, the total volume of real estate transactions in Greece reached €5.2 billion, a 25% increase compared to 2021. This growth is driven by several factors, including the country’s strategic location, its improving economic indicators, and the government’s efforts to attract foreign investment.

Properties in prime locations, such as Athens and the Greek islands, have seen particularly strong growth in recent years.

In 2022, the average property price in Mykonos increased by 9.2% year-on-year, while in Santorini, prices rose by 8.5%.

Rental yields in these high-end markets can also be attractive, with average yields ranging from 4% to 6%, depending on the property type and location.

4- EUR 400,000 Real Estate Properties

In all other regions of Greece, investors can qualify for the Golden Visa by investing EUR 400,000 in a single property with a minimum area of 120m². This category offers a wide range of options, from coastal villas to urban apartments, catering to different investor preferences and budgets.

While these properties may not be in prime locations like Athens or the Greek islands, they can still offer attractive investment opportunities. According to a recent study, the average rental yield for residential properties in Greece ranges from 4% to 7%, depending on the location and property type.

In regional cities such as Patras and Larissa, for example, the average rental yield for a two-bedroom apartment can reach up to 6.5%, while in smaller towns and rural areas, yields can range from 4.5% to 5.5%.

Property prices in these regions have shown steady growth, with an average appreciation rate of 3-5% per annum over the past three years.

How Greece Real Estate New Regulations Options Provide Vast Opportunities?

The new Greek Golden Visa regulations present a variety of real estate investment options for investors seeking to secure residency in Greece.

The exceptions for commercial to residential conversions and the restoration of listed buildings offer a more affordable entry point at EUR 250,000, while the EUR 800,000 and EUR 400,000 categories cater to investors with higher budgets and specific location preferences.

As with any investment decision, it is crucial to conduct thorough research, seek professional advice, and carefully consider your individual circumstances and goals.

By understanding the new regulations and evaluating the available options, investors can make an informed choice and select the real estate investment that best aligns with their objectives and risk profile.

With its stunning landscapes, rich cultural heritage, and attractive Golden Visa program, Greece remains an enticing destination for real estate investors seeking a pathway to European residency.

The country’s real estate market has demonstrated remarkable resilience and growth potential, with the number of Golden Visas issued increasing by 10% in 2022.

The Greek housing market has also shown impressive performance, with average property prices in Athens increasing by 7.5% year-on-year in 2022 and nationwide average price growth of 5.2%.

Projected appreciation rates of 6-8% in major cities and 4-6% in other regions over the next three years, combined with attractive rental yields ranging from 4% to 7%, make the Greek real estate market an appealing prospect for investors.

By capitalising on the opportunities presented by the new Golden Visa regulations and the thriving Greek real estate market, investors can secure a promising future in one of Europe’s most enchanting destinations.

How Savory & Partners Will Guide You to The Right Real Estate Options That Suit You

Whether opting for a commercial to residential conversion, restoring a listed building, or investing in prime or regional properties, the Greek Golden Visa program offers a wealth of possibilities for astute investors seeking to combine European residency with a robust real estate investment.

The best way to determine which option suits you best is by contacting Savory & Partners to book a comprehensive consultation with one of our Greek Golden Visa experts.