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The Spanish government has justified its controversial decision to scrap its so-called 'golden visa' programme for foreign property buyers, saying that the country's housing market has become "stressed" and it has caused house prices to soar.
Prime Minister Pedro Sánchez's government is speeding up its plan to eliminate the golden visa, which since 2013, large foreign investors have been able to obtain residency in the country when buying a home worth more than 500,000 euros. But this has sounded alarm bells over the past two years, with the government claiming to have noticed an obvious uptick in property prices in certain parts of Spain.
Minister of housing Isabel Rodríguez pointed out after a cabinet meeting in which the decision to end the golden visas was taken that 94% of these authorisations are linked to real estate investments. The golden visas have suddenly gone from 461 approved in 2016, to 997 in 2021, to more than double that to 2,017 approved in 2022 and another 3,273 last year.
A third of all the golden visas ever granted since the scheme was launched in 2013 have been granted in the past two years which according to the ministry, the total amounts to 14,576 since its implementation under the government of Mariano Rajoy. "It is from 2022 when the alarm bells went off," Rodríguez said following Tuesday's cabinet meeting.
The minister also revealed that investors from China, Russia, the United Kingdom, the United States, Ukraine, Venezuela, Iran and Mexico have benefited the most from the measure, with luxury real estate investments mainly in areas such as Barcelona, Madrid, Malaga, Alicante, the Balearic Islands and Valencia. Six provinces account for 90% of the authorisations, according to Rodríguez.
"In areas such as Marbella, golden visas already account for 7.1% of home purchase transactions, in Barcelona they reach 5.3% and it has been detected that they reach 10% in some municipalities in the Balearic Islands," the minister pointed out. "These transactions stress the market and increase the price of housing," she added.
Rodríguez aims to counteract the doubts expressed by business professionals and agents in the real estate sector, who consider the number of golden visas is limited when compared to the number of property sales and purchases in Spain, which is around 600,000. They claim authorisations of golden visas are not responsible for the rise in prices.
"The elimination of the golden visa makes no sense whatsoever, as the amount granted each year in Spain is minimal. Therefore, the only thing they are going to achieve is to set back, a little more, the investment of foreigners who want to buy property in our country," said Iñaki Unsain, general manager of ACV real estate agency.
"From the point of view of the market in general, and although it is a time when foreign buying is around 15% and at record highs, the impact it may have will be relative," added Ferran Font, director of research at Pisios.com.
The government recognises this is not a general solution to a "complex problem to which simple solutions cannot be offered". They said the plan to end golden visas is an attempt to "provide an exceptional response in specific places and cities where there is price tension and a lack of residential supply".
According to data released by Vivienda, since 2016 the total investment of those who have received a golden visa amounts to more than 10 billion euros, with an average per investor of around 951,203 euros.
The figure varies over the years, but in 2022, when the upturn in operations was detected, the investment sum rises from 838.1 million euros to 1.72 billion euros. In 2023 it rises to 2.51 billion euros. In any case, in average terms, the amount of investment rose only slightly, from 840,698 euros in 2021 to 857,105 euros in 2022, with an average per investor of 769,332 euros.
In the case of 2024, a total of 342 golden visas were granted in January, with an investment that, according to the ministry, reached 255.7 million euros, with an average investment value of 747,785 euros.
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