Dreaming of Europe
With a mixed outlook for the property sector internationally, what should buyers keep in mind before entering golden visa markets? A look at three countries
Buying a property is often the first way to establish residency requirements overseas. While more than 50 countries grant investment-based residence permits, Europe is more desirable with its commitment to democracy and strong passports.
The resettlement process may take up to five years, so it is important to consider the value of one’s investment over this period, particularly when property markets worldwide are in a state of flux.
The three-day International Real Estate and Investment Show (IREIS), which begins tomorrow in Abu Dhabi, will feature properties from different countries. GN Focus asked agents in Europe what investors can expect.
★Montenegro
The Balkan nation has yet to offer citizenship by investment, but the issue is being discussed by its government, says Danilo Kalezic, PR Manager of Porto Montenegro, a luxury marina village located in the Bay of Kotor, a Unesco World Heritage Site.
The development was recently acquired by the Investment Corporation of Dubai (ICD) and will be showcased at IREIS. Others such as Orascom, Aman Resorts and Qatari Diar also have projects here.
While property prices have not yet recovered to pre-2008 levels, a significant rise in capital values is forecast over the next few years. Montenegro is expected to conclude negotiations to join the EU by 2019. Further, the World Travel and Tourism Council expects the nation to be the fastest-growing tourism destination for the next decade.
“Further increase in capital value appreciation and with the backing of ICD, the value of the assets is set to strengthen significantly,” says Kalezic. In particular, he says Porto Montenegro’s real estate market has appreciated 10 per cent year-on-year since the establishment of the project in 2009.
★Cyprus & Malta
The Mediterranean island nations also introduced citizenship by investment in 2013.
Cyprus is extremely attractive, says Yulia Kozhevnikova of overseas property broker Tranio. com. “Cyprus has been gradually reducing the minimum amount of investment required from €10 million (Dh39.9 million) in 2013 to €2 million in 2016.” Malta, meanwhile, typically requires individual investors to make a minimum investment upwards of €1.2 million to obtain citizenship.
So far, Cyprus is experiencing weak price growth, but its Mediterranean lifestyle and proximity to the Middle East remain attractive for UAE residents. “Taking into account that in 2014 prices in Cyprus decreased by 8 per cent, and in 2015 by 4 per cent, a property that would go for €500,000 would now only be worth €441,000. In the second quarter prices decreased by 1.6 per cent year-on-year.” However, that presents a significant opportunity.
In Malta, prices increased by 7.6 per cent in 2014 and 4.9 per cent in 2015. “A €500,000 property purchased in the end of 2013 would now cost €564,400.
“In the second quarter, prices increased by 8.8 per cent year-on-year.”
Malta might actually be of greater potential, even if the growth is predicted to be modest over the next few years.