The News
The Spanish government on Monday announced it would scrap its “golden visa” program, saying an influx of wealthy foreign investors had driven up house prices for locals.
Since 2013, non-European Union citizens have been able to obtain fast-tracked residency by investing at least 500,000 euros ($540,000) into Spanish real estate, under a scheme introduced to attract foreign investment.
But with Madrid now among the most expensive real estate markets in the EU, complaints have mounted that outside investors are taking housing away from locals.
“Housing is a constitutional right and not a mere speculative business,” Prime Minister Pedro Sánchez said in a social media post on Monday.
Cities including Barcelona, Madrid, Málaga and Alicante “are facing a highly stressed housing market, where it is almost impossible to find decent housing for those who live and work in them and pay their taxes every day,” El Pais quoted Spain’s left-wing leader as saying.
Almost half of Spain’s golden visa recipients were Chinese, followed by Russians, Iranians, and U.S. citizens, the BBC reported.
Other EU countries including Portugal, Greece, and Ireland have modified or axed their golden visa programs in recent years following similar concerns.
SIGNALS
Ditching golden visas won’t help Spain’s housing crisis, analysts say
Despite Spain’s government citing the housing crisis as the main reason for ditching the golden visas, analysts say the move will do little to make housing affordable. The number of residence permits issued in Spain for real estate investment has been dropping, with only 1% of foreign investment in 2023 linked to these investors, the former president of the Spanish Association of Real Estate Personal Shoppers told housing news site Idealista. Spain’s real estate crisis is more the result of a larger lack of supply, said an Idealista spokesperson. Meanwhile, concerns over golden visas are more likely tied to national security and inflation, one social policy researcher told The Washington Post, labeling Spain’s decision as “a political maneuver with a smidgen of xenophobia.”
Australia scraps golden visas fearing political infiltration
Australia in January slashed a golden visa scheme that was known to be used by wealthy Chinese looking to escape political and economic difficulties back home, Radio Free Asia reported. While Canberra cited a lack of economic benefit, government agencies had long warned that the program — which saw 85% of applicants hail from China — was a gateway for “dirty money” to enter the country, according to The Australian, a conservative newspaper. One Chinese Communist Party-linked billionaire was expelled from Australia in 2019 for making an illegal $100,000 donation to a local politician, The Guardian reported. Dozens of Cambodian applicants linked to dictator Hun Sen were also granted the visa over the past decade, The Australian reported, with many suspected of being Chinese criminals using false Cambodian identities to store illegal funds in the country.
Hungary courts China with investor visas
After gutting its original golden visa program in 2017 over corruption allegations, Hungary has revived the scheme, which appears directly aimed at Chinese applicants. The move is for “strategically important guest investors” who invest at least 250,000 euros in real estate or 500,000 euros into private property, according to Emerging Europe, a business analytics firm. Many in the EU have called the move hypocritical, given that rightwing Prime Minister Viktor Orbán has drastically curbed other forms of immigration, particularly for refugees. Orbán — who is more accepting of Beijing compared to the rest of the EU — has actively worked on recruiting Chinese investment and security collaborations in recent years, and the golden visa program is being heavily promoted on Chinese social media. Hungary’s program is “a rare opportunity for us,” stated Hinanbian, a real estate blog on WeChat. “Hungary has always been a friend of the Chinese people.”