Greg Lindsay is a senior fellow for applied research and foresight at NewCities.
If there’s one thing the last two years have demonstrated, it’s the overwhelming importance of shelter, and comfortable shelter in particular. Between endless rounds of quarantine and lockdowns, remote work and virtual schooling, and borders snapping shut and re-opening at will, our homes have become the center of a drastically smaller world. Once-itinerant elites content to treat life as-a-service have had ample time to reassess how much they value safety, security, and space in where they live.
While the pandemic’s mortality will ebb in time with more vaccines and new treatments, each new variant conspires to both cement this hybrid ‘new normal’ and shatter any remaining faith in politicians to manage the virus. The result is an insatiable demand among global investors for not only alternative residence options as a back-up to the vicissitudes of citizenship, but alternative residences themselves. And that, in turn, has led to renewed interest in investment migration programs with real estate options, which had been overshadowed of late in favor of less asset-intensive ‘nomad’ visas. The name on the passport is no longer enough — it’s where would you rather wait out (or escape) the next lockdown?
Accelerating this trend is the trillions of dollars central banks committed to backstopping markets and (to a much lesser extent) essential workers, which predictably sent housing prices soaring in nearly every major economy, according to the IMF. In a perverse twist, the same homes are now seen as redoubtable investments against central bankers aggressively intervening to curtail inflation. Few assets are fortunate to be such double-edged swords.
Finally, the endless quest for low- or no taxation has ultra-high-net-worth individuals on the move again after last October’s G20 minimum corporate tax accord and the specter of future tax hikes on the rich to pay for increased climate- and social spending. The quest to relocate beyond the reach of tax authorities or ‘fiat’ in general has helped fuel the mania for cryptocurrencies such as bitcoin and ethereum, which promise to be both untraceable and inflation-proof.
The inaugural Henley & Partners Best Investment Migration Real Estate Index aims to quantify all of these trends, creating a first-of-its-kind metric for those in the market for a secondary residence. The variables comprising each score can be grouped broadly into four buckets: quality of life, upfront costs, paperwork, and liquidity. The results are an intriguing mix of extraterritorial entrepôts, sunny EU member states, Caribbean refuges, and more. A few notable nations:
The emirate with nine lives has reinvented itself yet again as a global south talent magnet. In addition to golden visas for entrepreneurs, students, and “special talents”, the five-year visa introduced in 2019 requires real estate investors to buy and hold property worth AED 5 million. Given the UAE is one of the few nations to suffer a decline in housing prices last year, Dubai’s famously frothy real estate market is practically a bargain by recent standards. And as one might expect, it scores highly on its ability to monetize and recoup investments.
The “sick men” of the Eurozone a decade ago, all three initially instituted property-based golden visas as a means to prop up both prices and government balance sheets. Following Greece’s early lead, Spain and Portugal have come into their own as post-Brexit destinations for Britons seeking access to the bloc, while the latter has also become a hotspot for digital nomads seeking “the New California Dream”. Eager to avoid having too much of a good thing, Portugal is now steering buyers away from Lisbon, Porto, and the Algarve to invest their EUR 500,000 in smaller communities needing revitalization — a best practice for other nations to consider.
Having originally pursued the EU’s only citizenship by investment programs, Cyprus and Malta’s ‘golden visas’ lag behind those of their larger neighbors on the index. But with both countries receiving heavy pressure from the European Commission, the pair are advised to streamline their real estate offerings without delay. They should take lessons from high-scoring Montenegro, which requires lower up-front investment, offers faster processing times, and also includes freedom of movement throughout the Schengen Area. That’s enough to cement its status as the best money-for-value option.
The only Asian entrant on the index, the unique Thailand Elite Flexible One Program offers a five-year multiple-entry visa options with concierge club-style benefits. The launch of the program in January 2021 was propelled by the pandemic and it aims to stimulate the real estate market and facilitate long stays for foreigners.
The index’s Caribbean nations share similar profiles and value options: relatively small sums up front and light property restrictions with no residence requirements, albeit lacking in some of the comforts of larger, more centrally located nations. But that can be a small price to pay for a path to secondary citizenship offering visa-free access to the Eurozone, the UK, China, and beyond.
In a time of such uncertainty, it’s unsurprising that those in pursuit of secondary residence options would also judge destinations by the quality of their real estate investment offerings. Nation-states and their policy makers interesting in implementing such policies should take a page from Portugal’s book and closely examine how investment migration programs can be used to buttress more strategic goals such as talent attraction and economic revitalization — to literally share the wealth.