There’s a myth abounding at the moment that the property crash in the UK has been mirrored in all other nations in the world – however, that is very far from the truth. Whilst it’s pretty undeniable that most countries’ economies have been negatively impacted by the fallout from the banking crises in the US and the UK and the resultant recessions that are continuing to be an ugly reality, not all countries in the world had property markets as precariously poised as the UK’s!
Take Italy as a perfect example – in Italy the local population are not as property obsessed as us Britons. Whilst we may move multiple times in our lifetime in a bid to trade up our property along the way, Italians on average only move once every 20 years or so. Additionally, houses are kept in a family for generations, and people’s fortunes are seldom built on a buy-to-let empire, or even off the back of their own home purchasing decisions.
So, if you want long-term stability in a property purchase, why not consider Italian real estate – it can still be a profitable acquisition if you buy in a popular area with international tourists, alternatively it can be a relatively safe place for your own cash if you’re happy to tie it in to bricks and mortar. Just be aware that sales don’t happen fast in Italy, so if you need to exit the market in a hurry you could be waiting around for longer than you’d hoped. In this report we present an overview of Italy’s property market for would-be buyers…
Italy has everything any property purchaser, expat retiree, holidaymaker or aspiring expatriate could want. It has the culture, the beautiful language, incredible landscapes, fascinating and fabulous real estate, it has beaches and the sea, sumptuous cuisine and excellent wine, it has beautiful people and it has a much more stable property market than the likes of Spain or Great Britain. What Italy doesn’t have is a great economy at the moment, and so this has had a natural impact on property prices – they are down on average about 10% compared to the peak – but this 10% average decline is for the mainstream market for Italian owner occupiers. This is not a reflection on the holiday home market – which is fairly limited in Italy anyway.
You see, Italians do things their way – they have never over developed and over sold to the extent the Spaniards did, and they have never built their short-term ambitions and fortunes on the buying and quick selling of real estate. Homes in Italy are kept in families for generations; what’s more, homes for new generations may be built on family land. So there is not an active internal market for property – although this is contradicted in terms of city based apartments and homes at the higher end of the market. But for us aspiring foreign property owners or expatriates hoping to move to live in Italy, it’s very well worth knowing.
It’s not a case that you hop across to Italy and bag a bargain in the form of a bank-repossessed property at auction – as you can in Spain for example. It’s not the case you can approach a struggling developer who has over extended and purchase a newly built property for well below market value, just to keep the guy’s cash flow healthy – as you can in Turkey for example. Rather, if you want a home for life – a true investment property, i.e., a property that is an investment for the long-term, then you could do far worse than target Italy.
You have many areas of the nation to choose from depending on your approach to home ownership Italian style. If you want to purchase a property to let out to the local market then perhaps you’d be best off buying a city-based apartment near the business district. This would bring you in a stable and steady, realistic rental income. If you want a home you can let to the tourism market then of course coastal property or homes in Tuscany or on the Lakes could be ideal. If you want a home that will never depreciate, until the canals erode it, try Venice, but if you want a property for you, for your family and friends, a property for life, then any area of Italy could be your home. The whole nation has real estate opportunities – but they are not the sort of opportunities we may be hoping for off the back of failing markets seemingly everywhere else. Italy is not a country where a boom has happened leading to an inevitable bust – so whilst you may currently be able to haggle a little harder as there is even less interest and money in the market, it is not a country where you will definitely bag a bargain. Of course, there are exceptions to the rule, but the rule in this case is that Italy’s is a far more stable market, suited only to those who understand that to get the best out of a property you have to hold it for the long term!