What is the "golden visa" and why is it losing its luster in Europe?

Portugal, which has benefited more than 5.8 billion euros from the "golden visa" program, changed that last month by removing real estate from investment options in order to reduce speculative purchases and calm the housing market . The massive influx of large numbers of foreigners into the country displaced thousands of low-income Portuguese from urban housing.

Meanwhile, after 10 years of implementation, the "golden visa" has brought billions of euros of investment to Spain's budget, but at the same time it has caused a devastating housing crisis for its citizens. The latter say that regardless of profession and income, it is almost impossible to find an affordable house.

Precisely to cope with the housing crisis, Spain announced a few days ago that it is removing the "golden visa" and is joining the list of European countries that have done the same. Six Eurozone countries launched the 'golden visa' program at the height of the euro debt crisis in 2012 in an attempt to cover their budget deficits. Those forced to turn to international lenders, Spain, Ireland, Portugal and Greece, desperately needed cash to pay their creditors and in doing so re-heated half-dead property markets.

Spain issued 14,576 'golden visas' to wealthy foreigners who bought property worth more than 500,000 euros. But in doing so, they raised real estate prices to record highs for the Spanish. "Golden visas" granted third-country nationals temporary residence permits, often without having to live in the host country. Investors from China, Russia and the Middle East flocked in droves and bought properties. In the last few years after Brexit, many Britons bought homes in Greece, Portugal and Spain, followed by many Americans who cannot live as comfortably as they would like in American metropolises.

Greece, one of the last European countries to offer the "golden visa", has recently increased the required investment amount to 800,000 euros from 500,000. But now the "golden visa" programs are coming to an end, as governments try to repair the damage they caused to the housing market. And after Russia's invasion of Ukraine, EU officials called for an end, warning that 'golden visa' programs are being offered for money laundering, tax evasion and even facilitating organized crime.

Ireland ended the program last year in part because of concerns that it was offering to launder Russian money. The withdrawal of the programs follows a wider housing crisis in Europe, whose property markets have for years undergone a transformation that has excluded middle-income workers, including doctors, professors and police officers.