Making it more expensive for rich foreigners to buy their way into a country just ends up making rent spike in all the neighboring towns instead.
March 20, 2026
Original Paper
Threshold-Based Policies and Distortions in Housing Markets
SSRN · 6441680
The Takeaway
When Greece doubled the minimum real estate investment required for residency in popular municipalities, it created a 'balloon effect' where buyers flooded the nearest 'cheap' markets. This distorted housing costs in areas that weren't originally facing affordability crises.
From the abstract
This paper examines how investment thresholds embedded in residence-by-investment programmes shape housing market outcomes. The analysis exploits a reform of Greece’s golden visa scheme that selectively doubled the minimum real estate investment requirement - from €250,000 to €500,000 - across municipalities. Using comprehensive administrative data on property transactions from 2017-2024, the study combines a bunching framework with a difference-in-differences design to identify behavioural resp