Housing prices, political divisions, high cost of living, the rise of remote work, crime rates in some U.S. cities, a strong dollar now at parity with the euro for the first time in more than 20 years — these are among the reasons experts mention to explain the wave of Americans relocating to Europe, or planning to do so in the near future.
Some have other, more personal reasons such as love for the European way of life, the food, wine, a job or following family members who have already moved to the old continent.
In a recent article entitled “Americans Who Can’t Afford Homes Are Moving to Europe Instead,” Bloomberg writes that the traditional trends of retirees and the wealthy as the prime American buyers of real estate in Europe have changed: “Relatively cheap housing — particularly in smaller cities and towns — and the rise of remote work have made the continent alluring to a wider range of people, including those who are younger and find themselves priced out of the housing market at home.”
Americans’ high demand for houses in Europe
International real estate businesses release data every day showing a growing interest from American buyers, particularly concerning Portugal, Greece, Italy and Spain, among others, that offer special deals for golden visas, digital-nomad visas, green visas and lower-cost housing.
In the past few years, Portugal appears at the top of most of the lists of places recommended for expats and retired people to enjoy a good life and its golden visa program is one of the most popular in the world. The number of Americans living in Portugal rose 45% in 2021 from the previous year, according to government data.
In Spain, also a popular destination and hosting the largest American population in Europe, the number of U.S.-born residents rose 13% between 2019 and 2021 and demand continues to rise.
Sotheby’s International Realty has said that requests from Americans looking to move to Greece rose 40% in the April-to-June period this year compared to a year earlier. Ditto, Paris. In the rest of France, Greece, Spain and Italy, U.S. demand for houses is the highest in recent years.
Golden visas and lower-cost housing
The median property cost in the U.S., according to Nasdaq, is $428,700, “though prices vary wildly from city to city and state to state.” While the average price in Hawaii is over $1 million, in West Virginia that figure drops to below $150,000.
The average property cost in Portugal — “a popular destination for Americans right now” — is some $365,000 as of the third quarter of last year. “Properties in some parts of the country are less than $125,000.”
According to Bloomberg, “the average price of a home in Atlanta reached $404,575 as of June 30, up 19% from the previous year, whereas an 800-square foot property in the Palermo region of Sicily cost €86,560 on average, according to real estate platforms Zillow and Idealista.”
As widely reported, in Italy “if you’re willing to live in a remote village and tackle some serious renovations, there are towns where local authorities sell fixer-uppers for just €1,” Nasdaq explains. “It’s not as sweet a deal as it sounds as you have to commit to the refurbishment costs and legal fees.”
The highly-publicized €1-house a deals are not the only ones. There are so many semi-abandoned small towns in Europe, with local officials searching for creative ways to revitalize their populations and economies — and with plenty of empty small houses, villas and even palaces to offer — that the number of international real state agencies and househunters working in the “€1 real estate market” market has multiplied.
Portugal at the top
Although Portugal has introduced restrictions in response to pressure from the E.U., it is still the leading destination for individuals and families seeking residence within the European Union.
A ‘golden visa’ — a residence permit that provides qualifying foreign citizens and their families with full rights to live, work and study in Portugal — can be obtained with an investment of €350,000. In Spain, that investment is higher at €500,000.
The golden visa also permits freedom of movement throughout the 27 E.U. countries,
So far this year, Portugal has collected €397.7 million through its golden visa program, SchengenVisaInfo.com reports. That’s a 34% increase compared to the same period last year.
The country offers “eight types of eligible investments in the Portuguese Golden Visa program, including the ‘green visa’ which permits foreigners to obtain Portuguese residency if they invest a minimum of €500,000 in organic agriculture, ecotourism, renewable energy and other environmental projects,” the publication reports.
Since 2012, when the program was introduced, it has brought nearly €6.5 billion to Portugal, with a total allocation of 11,060 golden visas.
Restrictions or not…
Such bountiful results have not been obtained without controversy and government regulations updated.
E.U. officials have strongly urged member governments operating such special visa plans to terminate them, alluding to the fact that “the Golden Visa schemes are a gateway to Europe for corrupt people and money laundering.”
From the start of this year, Portugal has been placing limits and conditions on the program. Cities like Lisbon and Porto, highly popular among golden-visa investors, as well as the most developed coastal areas, are now out of reach in a bid to push foreign investors towards low-residency regions.
Still, as the numbers above show, the Portuguese visa-for-investment program keeps growing, particularly among American investors. “The U.S. has overtaken China as top source of applicants for Portugal’s Golden Visa,” the Portugal News explains.
“With about 5% rental income per year and capital appreciation of up to 4% a year, residential units in the interior of Portugal are still an attractive proposition,” World Finance reports.
Greece, another favorite among expats and digital nomads, has announced it will implement changes in its visa-for-investment program, the main alteration a doubling of the minimum amount of investment required to €500,000.
The measure, according to local media, was made among other reasons to help free up more affordable housing for Greece nationals.
The changes are expected to take place early in 2023.