Spain's recent attempt at a "Golden Visa" program for international real estate buyers has failed to spark much interest and hasn't capitalized on the huge market of entrepreneurs and international investors. Initially potential investors were attracted by the lower starting level of €160,000, but this has since been increased to €500,000.
Paul Williams is the managing director of La Vida Spain, a company which specializes in the sales of Spanish property, and he also runs the blog Spain Visas. He had this to say about the situation: "We have been monitoring feedback from potential investors. The comments are there for anybody to read. I hope the Spanish government are taking note from their potential customers and not just gazing internally."
La Vida has received more than 800 inquiries from international investors so far, and many were interested in the lower starting level of €160,000 that the government announced initially announced would qualify for a Spanish residency visa. Inquiries are still high from higher-end investors located in China, the Middle East, India and Russia.
Spanish Visas blog reveals exactly what international investors think about the situation, and most seem to feel €500,000 is too much for an EU citizenship. One potential investor is quoted as saying they would rather spend it on cheap US properties.
Last year La Vida became the largest international seller for Spain's most prominent banking group for real estate sales. The company is working with several Spanish banks that have large portfolios of repossessed property. Property repossessions in Spain have dominated the market for international sales recently, and in some areas the banks have cut property prices to less than one third of the prices seen in 2007.
La Vida Spain is continuing to experience high demand for bank property with over 80 international sales in the previous quarter. However the stock of repossessed properties that will qualify for the Visa investment program is limited. A recent review of properties for sale by the Spanish banks showed less than 0.5% were priced at €500,000 or more, and demand from investors could lead to too many buyers chasing too few properties.
Paul Williams went on to say "This is a big opportunity for the government to make a bold move towards solving the property prices in Spain at the lower price levels. Unfortunately the new level at three times the average property price in Spain fails to make any impact on the bulk of the problem but could lead to a distortion in the market for luxury properties."