Research by the Spanish daily El Pais reveals there were 681 so-called ‘Golden Visa’ investments in real estate in Spain last year, the largest number since the scheme began in 2013.

The previous record was in 2016 with 658 successful applications for Spanish Golden Visas based on property investments of 500,000€ of private capital that year, dropping to 599 in 2018, and then up to 681 last year, an annualised increase of 13.7%.

Property industry voices have called for the Spanish government to lower the investment threshold to attract more investors, like Portugal has done, with €400,000 being the minimum investment in deprived areas.

2019 might have been a record year for the Spanish Golden Visa scheme, but you can argue it has never been a great success, and the numbers generated are insignificant in terms of property sales and revenue. 681 Golden Visa property investments need to be seen against an overall market of half a million transactions last year. All last years Golden Visa investments in property only brought in something just above €340m, which doesn’t move the needle when looking at Spanish public accounts. The Spanish Golden Visa scheme is nice for the companies that benefit from this business, but not very relevant for the rest of the economy.

That said, it might have an impact in the small foreign niche of high-end real estate investments in Span. Research by El Pais shows there were 3,858 foreign investors who spent more than 500,000€ on real estate last year, of which 1,393 were investors from outside the EU, many of whom must have been Golden Visa investors. Looking at these numbers, it’s reasonable to assume that Golden Visa investors in 2019 were somewhere between 30% and 50% of the non-EU market spending 500,000€ more more on Spanish property.

In terms of Golden Visa investors in Spanish real estate by nationality in 2019, China was number one, as usual, with 455 successful applications, followed by Russia on 42 and Iran 21. US investors, some no doubt fleeing Trump, were fourth with 16. I was surprised not to see Turkish investors in the top five, but maybe the economic crisis in Turkey has now turned off that tap.

The Spanish Golden Visa scheme was a flop when first introduced in 2013 for being too bureaucratic and unattractive compared to other countries. However, after tweaking in 2015, it attracted more interest, especially with Chinese investors heading for Barcelona, where prime property prices were still attractive in the wake of the Spanish property market crash.

The EU, NGOs, and Spanish left, hate Golden Visa schemes for being elitist and money laundering vehicles, they argue. With the Left now in power in Spain, you have to wonder how long the Spanish Golden Visa Residency-by-Investment Scheme will survive. However, in the light of the coronavirus crisis, with Spain now facing rocky times ahead, and a housing market on the back foot, the government might start to take a more positive attitude towards a scheme that brings in property investors and money.