The Greek government is making a change to its Golden Visa program wherein the threshold will increase to €800,000 in certain areas as a means to manage the acute housing issue that has developed in recent years.

This change was revealed in Parliament on Friday by Greek Prime Minister Kyriakos Mitskotakis and will relate to those wishing to invest in real estate in urban centres and islands of Greece.

“Pressure has been created for Western Athens by the increase in the price of the Golden Visa. What we are discussing with the Ministry of Finance is a further increase in the limit. I’m talking about urban centres and islands, there the Golden Visa limit can go as high as €800,000,” Mr Mitsotakis said in Parliament.

The Greek PM stated that the current €250,000 threshold for the program (which relates to foreign investors purchasing properties in Greece) will remain for areas that do not have residential pressure, using Pella and Kozani as examples.

The problem has been addressed in a recent study by Piraeus Bank, which found that there are currently 212,000 homes missing from the market as a large part of the existing ones are only available for short-term rental, thus leading to increased purchase and rental prices.

This change is hoping to soften the interest in the program in a manner that would help slow the rising prices of property sales and rentals in the Greek market.

Mr Mitsotakis added that there is interest to also alter the Golden Visa program so that participants wishing to purchase properties through it can only engage in longer-term leasing agreements, rather than shorter-term ones.

This was in response to PASOK leader Nikos Androulakis’s speech in which he made this suggestion, arguing that this helps lead to higher rent pricing.

“I agree with your proposal and – why not? – let’s proceed immediately so that the properties acquired with the Golden Visa program go either for own residence or a long-term lease,” Mr Mitsotakis said in response to Mr Androulakis.

The Greek PM did stress that the program was not the only factor in this major issue.

“It’s convenient to attribute blame to a single villain for every complex issue,” he said, noting that only 7% of real estate transactions in recent years were linked to the Golden Visa.

The issue of this program is tied strongly to the intense demand in Greece’s housing market, which is among the cheapest in Europe.

Further measures are expected to be announced in the near future in relation to this issue, with the aim of easing the financial pressure (particularly in rental properties).