Prospective Investments in Real Estate in Europe was written for Playlouder by a contributing author. Please note that contributing opinions are that of the author. They are not always in strict alignment with our own opinions.
Wealthy US citizens are increasingly interested in European residency and citizenship. We will tell you the reason for the demand for European real estate and relocation, as well as how you can get citizenship or a residence permit for buying real estate.
Why American Investors Are Increasingly Investing in European Real Estate
It’s fair to say that the US passport is one of the most respected in the world. It grants permission to visit a total of 188 countries, including the Schengen states and the UK, without the need to request a visa. But the right to visit is not quite the same as the residence permit, which is highly desirable for many, including US citizens.
In recent years, Americans have started to regard Europe residence as an excellent opportunity to reduce living expenses without compromising the quality of living. That’s why obtaining a residence permit in Europe is a pressing matter for them.
Americans tend to make investments in real estate. Predictions show that more than 50% of industry experts from Europe expect an increase in American cross-border capital investment in real property.
Another vivid example is the number of participants in Portugal's residence permit program. A total of 124 American investors became residents of the country in 2022. So, American investors are truly looking for prospective real-estate investments in Europe.
Reasons for Investment Relocation
Let’s review several reasons why Americans tend to purchase more real estate in Europe:
Rise in the US real estate prices
Over the first quarter of 2022, US home prices increased by 18.7% compared to 2021. This is an elevated rate, especially in correlation with the pricing of residential real estate in the EU, which rose only by 10%. If the tendency keeps the same for the next several years, the difference between real property prices will be two-fold.
Cost of Living vs Quality of Life
The second essential parameter to look at is the inflation rate. In the US, inflation amounted to 8% as of October 2022, which is among the highest registered rates since 1980. Now its not that inflation in Europe is that much better, but it is true that the overall cost of living in some areas of europe is less than the US.
In additional to the lower cost of living, the quality of living in certain areas of Europe can be higher than that of similarly priced areas in the US.
Depreciation of Euro
For more than 20 years, the value of the euro had been higher than the dollar. But in July 2022, the euro fell below the dollar, indicating the high depreciation of this currency and the growing recession.
Trends of 2022 in Real Estate Selection
Let’s take a look at the countries that get most of the attention of American investors.
Whether it's an investment in commercial, residential, or tourist property, the listed countries are likely to reward an investor with high returns.
Greece Real Estate
This country offers an affordable lifestyle and plenty of investment opportunities for all. There is a wide range of residential real estate options available. The average cost of residential real estate in Athens is about €2,000 per square meter (€185 per square foot).
Spain Real Estate
From land and commercial property to residential property, Spain encourages foreigners to invest in all property types. The average cost of residential real estate in Madrid is about €3,243 per square meter (€301 per square foot).
Italy Real Estate
Located in south-central Europe, this country is full of beautiful destinations perfect for living or for tourist visits. The average cost of residential real estate in Rome is about €3,830 per square meter (€356 per square foot).
Cyprus Real Estate
Cyprus is known for having mixed-use residential, commercial, and touristic developments. So, the investment choice here is vast. The average cost of residential real estate is about €2,023 per square meter (€188 per square foot).
Portugal Real Estate
Located near the Atlantic Ocean, Portugal offers different real estate options, mostly residential, from cheap to relatively expensive ones. The average cost of residential real estate in Lisbon is about €3,030 per square meter (€281 per square foot).
France Real Estate
This country truly has it all. It attracts the wealthiest investors with its cultural heritage, excellent cuisine, and catchy urban views. The average cost of residential real estate in Paris is about €6,370 per square meter (€592 per square foot).
Austria
It’s a mountainous country with a high standard of living. To buy property in Vienna, one of the most attractive Austrian cities, one should pay an average of €8,757 per square meter (€814 per square foot).
Where to Get a Residence Permit
Now, let’s briefly review some of the European countries that allow expatriates to obtain residence permits by investment:
Greece Residency Permits
Here, real estate buyers who spend more than €250,000 are eligible for a five-year residence permit. Alternatively, €400,000 capital investment in a Greece-based company grants a permanent residence.
Spain Residency Permits
The legislation here requests an expatriate to invest more than €500,000 in commercial real estate for temporary residence and €1,000,000 in capital or Spain-based companies for permanent residence.
Portugal’s Residency Permits
The program allows non-EU citizens to qualify for a residency permit and eventually a passport in the country through investments. Lowest cost of entry is €350,000 for Real Estate in an urban rehabilitation area, including the cost of renovations. With a Portugal Golden Visa, you can live in Portugal and travel within most European countries without an issue.
Latvia Residency Permits
In Latvia, it’s enough to invest €250,000 in the property of Latvia to get a residence permit. If it’s a first temporary residence permit, an applicant must pay 5% of the property value into the state budget.
Bulgaria Residency Permits
The legislation here imposes on foreign investors a €312,000 worth purchase of real estate for temporary and €1,024,000 for permanent residence.
In Conclusion
At the end of the day, investing in real estate in European countries can be very profitable. Investors not only get promising returns from the purchased property but also a residence permit that grants them some favorable rights. These advantages are well-understood by American investors who are getting increasingly interested in investing in European real estate.
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