SCMP: Chinese property bargain hunters flock to Portugal during Labour Day holiday

SCMP: Chinese property bargain hunters flock to Portugal during Labour Day holiday

11 May, 2016

Lisbon tops choice for Chinese buyers eager to tap into ‘golden visa’ scheme and property investment.

Dozens of high-rolling Chinese buyers flocked to Portugal in search of investment opportunities during the three-day Labour Day holiday last week.

The European country is popular among Chinese nationals eager to acquire a Portuguese passport and invest – mostly in property – in Lisbon, thanks in part to a fast-track “golden visa” investment scheme.

Tariq El-Asad, managing director of real estate consultancy firm Tamea International, said the annual holiday was a peak period for Chinese clients.

“During the Chinese New Year and the Labour Day holiday we see a huge increase in Chinese clients… It’s the peak time,” El-Asad said. “We get Chinese clients throughout the year. Usually, they come in big groups with their families and friends during holiday seasons, and want to invest together.”

Interest from Chinese investors is on the rise, with Portugal approving a record 130 “golden visas” to Chinese nationals in March, according to Portugal’s Real Estate Professionals and Brokers Association.

Portugal introduced the scheme for major foreign investors in 2012 in response to the financial crisis and a weakening euro.

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There are varying levels of investment and benefits include a residence visa waiver for entering Portugal, an exemption for travelling within the Schengen area and the ability to apply for Portuguese citizenship after six years.

In all, 3,165 golden visas had been issued up to March, with Chinese nationals accounting for about 80 per cent of the total. The visas have brought in 1.92 billion (HK$17 billion), of which 1.73 billion was in the form of property investment.

The scheme has had its fair share of detractors who have accused the Portuguese government of selling “nationality”. In other European countries, similar investment incentives have also been seen as potential sources of corruption and money laundering.

Screening of requests for the golden visas slowed after a corruption scandal involving Portuguese officials and Chinese citizens erupted in 2014.

Association president Luis Lima said the crisis had blown over.

After a recent business trip to Beijing, Lima said Chinese citizens were still very keen on the golden visa.

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El-Asad said that Chinese investors typically bought a couple of one-bedroom flats for 300,000 and 350,000 each in Lisbon, with developers covering management services.

“[Developers] promote the apartments to tourists ... So a Chinese buyer can buy a property, apply for their golden visa and get a guaranteed rental of four or five per cent for five or sometimes up to ten years from the developer and the developer also gives one or two weeks of personal use a year,” he said.

Golden visa holders are required to be in Portugal for only seven days a year.

“Chinese buyers, because they visit Portugal less regularly, look for something that is purely investment,” El-Asad said. “But we are seeing a shift … More people [are] looking for commercial spaces and small businesses ... We are seeing more people looking at Portugal as a realistic place to live as well.”

Beaches, countryside, food and the low cost of living are some of the attractions to Portugal, he said.

“Comparing to other European cities, like London, the cost of living is much lower and the quality of life is very high,” he said.

Read the original South China Morning Post, by Raquel Carvalho, here.