A Decade of Golden Visas in Spain: From Saudi Buyers in Málaga to Chinese Investors in Madrid
Spain's golden visa program, which provided residence permits to non-EU foreigners purchasing real estate worth at least EUR500,000, has reached its ten-year mark. Established in 2014 under the Entrepreneurs Act by the Popular Party to attract foreign investment, the program was recently terminated by the government led by Pedro Sánchez, following an amendment to the Judicial Efficiency Law approved in November. The official cessation of golden visas is set for April 3, as confirmed by the Spanish Official State Bulletin.
During its operation, Spain issued a total of 22,430 golden visas, with 93% concentrated in seven provinces: Barcelona, Madrid, Málaga, Alicante, the Balearic Islands, Girona, and Valencia. The majority of these permits--75%--were granted to citizens from Asian countries (primarily China) and non-EU European nations (notably Russia, Ukraine, and the UK post-Brexit), according to data from the Permanent Immigration Observatory of the Ministry of Inclusion, Social Security, and Migration.
However, the impact of these permits varies across regions. In major urban centers like Barcelona, Valencia, and areas in the Balearic Islands facing severe tourism pressure, local organizations and experts have noted adverse effects on housing affordability. Conversely, in regions such as Málaga, Alicante, and Girona, the real estate markets for foreign investors and local residents have remained somewhat distinct.
In Madrid, there has been a noticeable divergence in buyer profiles: Chinese investors tend to favor more affordable neighborhoods, while Latin Americans are drawn to more affluent areas. The demand surged post-2021, coinciding with the easing of pandemic restrictions, Brexit implications, and the growing perception of these expedited permits as advantageous for wealthy individuals, leading to a final spike in real estate transactions. The threshold of EUR500,000, once a significant investment, now reflects the cost of new or renovated properties in urban centers.
Jaime Palomera from the Urban Research Institute of Barcelona has expressed concern over the artificially inflated demand driven by individuals with no residential needs, which exacerbates the existing housing crisis. He highlights that over half of residential purchases in Spain are made without financing and that about 15% are by non-resident foreigners. While specific city data is lacking, the trends from 2014 to 2023 indicate that the golden visa program intensified pressures in larger cities and coastal regions, where properties are often viewed as investment assets rather than homes.
In Barcelona, the golden visa program has been particularly popular among Asian and Eastern European buyers, often seeking properties as safe havens or investment opportunities. Real estate professionals report a mix of foreign clients seeking both residential properties and those aiming to invest for rental income.
In Girona, the typical buyer profile consists of young professionals and families from the UK, China, Russia, and the United States, looking for both personal and investment properties. The demand for second homes and tourist rentals is significant, especially in areas like Empuriabrava and Baix Empordà.
Madrid's golden visa landscape is characterized by a mix of Chinese and Latin American buyers. Many Chinese investors are purchasing multiple properties in working-class neighborhoods, often motivated by educational opportunities for their children in Europe. Meanwhile, Latin American investors see these visas as a secure investment strategy.
Málaga has attracted a younger demographic of entrepreneurs and executives, particularly in upscale areas like Marbella and Estepona, where high-end real estate is prevalent. Despite the focus on luxury properties, many buyers are still looking for budget-friendly options that meet the minimum requirements for visa applications.
Alicante's real estate market remains strong, particularly along its northern coastline, which has seen a surge in interest from wealthy foreign buyers. Industry experts warn that the elimination of the golden visa program could diminish the appeal of these properties, impacting perceptions of Spain as a favorable investment destination.
In Valencia, the influx of foreign investors has significantly affected local rental markets, with long-term residents being displaced as property prices soar. The predominance of Asian and Eastern European buyers has raised concerns regarding local housing accessibility.
Finally, the Balearic Islands have seen a notable increase in golden visas, driven primarily by UK nationals seeking refuge from adverse tax policies at home. The environmental impact of such investments is also under scrutiny, as they contribute to resource consumption in a region already grappling with tourism-related challenges.
