According to various reports by Spanish property publications and news outlets, the Spanish Golden Visa Program has seen a 50% decline in investments during the first 5 months of 2020, driven largely by the impact of Covid-19 related border closures on migrant investors’ ability to travel to Spain.

The number of Golden Visas issued between January and May dropped from 285 in 2019 to 113 in 2020, driven largely by a steep decline in applications from Chinese nationals. Applications from China, being the largest source market for Golden Visa applicants, declined by 64% year on year. Russian applications similarly dropped from 21 to 6, year on year.

Spanish industry insiders such as Colliers Spain’s Mikel Echavarren believe that the government’s populist, anti-immigrant agenda may be contributing to the decline as well.

Tourism is Spain’s third-largest economic contributor after the industrial and financial sectors, contributing around 10.5% of the country’s total Gross Domestic Product. By as early as April 2020, the economy had already shed over 900,000 jobs, with a large percentage of losses recorded in the tourism and hospitality sectors.

Spain, along with its Iberian neighbor, is going to need to all the cash it can get in the coming year. The general of the Spanish APCE Developers and Builders Association has therefore urged the Spanish government to consider reducing the minimum investment requirement for obtaining the Spanish Golden Visa to €250,000 for a period of 2 to 3 years to reinvigorate demand in the currently depressed investment migration market.

At this price point, the Spain Golden Visa would be able to compete very effectively against Portugal’s €280,000 Golden Visa, however the latter frequently involves an investment in a hotel development, rather than freehold residential property.

The program had played an instrumental role in bolstering Spain’s economic recovery in the aftermath of the 2008 global financial crisis, and could provided similar fiscal benefit in combating the effects of the Coronavirus. The Spanish investment residency program, however, has been in the cross-hairs of the Spanish Left for a number of years, and the government would need to do some fine footwork to convince the Left of the advantages of creating a to €250,000 Spanish Golden Visa in 2020.

Another consequence of such a decision could be that it would trigger a price war among the other European Golden Visa Programs, which, while beneficial for investors, could lead to further scrutiny and resistance from Brussels.

This is a developing story, and will be updated as more information becomes available.