Real Estate News, Reviews and Investment
Article: Italy is ripe for investment especially in luxury housing.
Italian news source ANSA reports that the housing real-estate market in Italy has touched a new low of 1985 levels with only 444,000 units sold in 2012. There is unlikely to be any significant increase in house sales until 2014 and prices are likely to start growing only by 2015.
Sales for the fourth quarter of 2012 were particularly bad, declining in volume by almost 30%. And for the year overall, the residential property market was down by over a quarter.
The residential property market
Any recovery in the market will depend on the state of the economy in general and the return of liquidity to the system.
The main problem for potential Italian buyers has been the clamp down on availability of mortgage financing by Italian banks, which has restricted the possibility of buying to:
On the other hand, the market for luxury housing showed a 5% increase compared to a 2% increase on average in the rest of the world.
Buyers for almost 36% of the luxury properties were looking for a coastal location while another 33% were looking for country properties in Central Italian locations such as Tuscany and Umbria. Mountain and lakeside properties accounted for the rest.
Sardinia, Venice and Liguria are places that are becoming popular while Tuscany and Umbria, though accounting for more than half of luxury property sales, are drawing fewer buyers than before. Liguria and Tuscany are the places where the highest value houses are located and Liguria has become the focus of 40% of buyers looking for properties worth Euro €15 million or more because of its:
The declining house prices are attractive to foreign buyers with the disposable income to consider a second home or a retirement home in Italy.
They may also be able to obtain a mortgage on favorable terms from banks in their home countries.
The bottom line
Clearly there are investment opportunities in Italian residential real estate. However, if you are looking at a property that requires extensive renovation, keep in mind that recent increases in taxation for small businesses means that many contractors will operate with higher prices and a smaller work force. Needless to say, you will need plenty of patience in managing such projects.