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European property rules aimed at investors

Updated: 2012-12-03 01:04
By Zhao Shengnan ( China Daily)

Countries hope to lure Chinese home buyers with visa policies

While much of China is feeling the pressure of soaring home prices, the relatively cheaper homes in some European countries that grant temporary or permanent residents visas seem to provide a shortcut to relief for many Chinese.

"I've been following the European immigration policies for a while because some countries' requirements have become much easier to meet than before, and I don't want my child to live under the overwhelming pressure of job hunting or mortgage paying as I used to do," said Liu Changying, a mother of a junior high school student.

Liu is among the increasing number of Chinese who began considering buying houses — that would bring permanent resident visas — in Europe after several crisis-hit countries launched property policies targeting overseas investors, especially those from China.

Cyprus, which probably was not in Chinese immigration picture before, has now emerged as the front-runner in this race.

It is currently the only European nation that offers permanent resident visas, instead of residency rights, to Chinese who buy property worth at least 300,000 euros ($390,400) there.

Under a new fast-track procedure, it takes prospective migrants only 30 to 50 days to get visa approval, Georgios Leptos, a member of the executive committee of Cyprus Chamber of Commerce and Industry, said at a forum in Beijing on Friday.

Cyprus, which has a population of 870,000, has sold more than 65,000 properties to foreigners since 2000 and more than 500 properties to Chinese buyers since May, he said.

The Spanish government is considering granting residency to foreigners who buy a house in the country worth 160,000 euros or more. The plan, announced by Commerce Ministry Secretary Jaime Garcia-Legaz on Nov 19 and expected to be approved in the coming weeks, would be principally aimed at Chinese and Russian buyers.

This year, Ireland and Portugal also offered residency to foreigners who buy properties — in Ireland, for property worth more than 400,000 euros, and in Portugal, more than 500,000 euros.

Not an easy path

These European countries saw the number of Chinese immigrants rise this year, but not as dramatically as was expected, said Wang He, supervisor of the business immigration project department of Well Trend United Inc in Beijing.

"These countries can hardly provide as much in higher education resources — the top attraction for Chinese parents — as traditional destinations like the United States and Australia," she said.

The non-English languages, sluggish economies and long duration from upgrading residency rights to permanent residential approvals may also be obstacles for Chinese immigrants, she added.

Cyprus, Spain, Portugal and Ireland have all been reeling from the global financial crisis since 2008, which plagued their inflated property markets and left their banks holding bad mortgages and deeds on real estate worth only a fraction of what it had been before the downturn.

Spain had a stockpile of unsold houses built during a construction boom that went bust in 2008, throwing some 5 million Spaniards out of work and resulting in 300 evictions a day in the first half of 2012, Australian Associated Press reported.

Most of the unwanted houses are located in desolate and less inhabitable suburbs, according to Shen Jie, a 25-year-old Chinese student at the Technical University of Madrid.

"If a Chinese person has to stay in an empty city for five years waiting for the permanent residents visa, without a job or Spanish skills, will he or she still be enthusiastic about the plan?" he asked.

Madrid's proposal would not allow foreigners to work in Spain.

"Operation Emperor", conducted by Spanish police in October, has also dampened Chinese investment, Shen added.

More than 50 Chinese were arrested during the operation, charged in a money-laundering scheme.

"Blindly wooing and injecting immigrants' money to revive the collapsed property market, instead of reflecting on the crux of the economic deadlock, could bring more problems to Spain," Shen said.

Growing racism is one example, said a Chinese person in Spain who asked not to be named.

"I don't feel the trust in Spain that I did in the other Western countries, and it was frustrating to often be asked to check my bags when entering a supermarket and show my passport when paying with a credit card," said the man, who intends to move to Cyprus.

But Cyprus, with 180,000 migrants, is also gripped by xenophobia, Cyprus Mail cited an official as saying.

"You can forget about Cyprus if you want to make a living, because its own nationals already have employment difficulties, but it may be a good option for those who have stable overseas incomes and would like to telecommute," the man said.

"People who want to immigrate to Europe need to make careful choices based on their needs and situations, as well as what these countries can really provide you."

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