As Canada closes its door, Spain puts out the welcome mat
Madrid's move to grant residency to foreigners who invest at least €500,000 in real estate will prove tempting proposition to bargain hunters
Many people from Hong Kong and the mainland may have been dismayed by Canada's decision to terminate a programme that granted residency to those who provided interest-free loans of HK$5.5 million.
But when one door shuts, another one opens.
The Spanish government recently enacted legislation that grants residency to overseas nationals who invest a minimum of €500,000 (HK$5.33 million) in real estate. This has led to a surge in interest and we are already beginning to see small groups of such investors arriving, chequebooks in hand.
Chinese developers may also secure options for blocks of flats and sell the units to purchasers in China, who would then be eligible for Spanish residency.
Spain has been behind the curve on this issue. Portugal, for instance, has had a similar system up and running for a year and it has proved very popular.
Many regions in Spain suffer from oversupply, particularly in the residential market. This should not be unexpected considering the levels of construction before 2008.
Furthermore, unemployment in these areas can exceed 25 per cent, even higher among the young. This may stifle demand and prices for years to come.
