The slump in the European economy, including Italy, has continued for several years, despite a number of attempts to stimulate activity.
1 – Programs in Italy designed to provide sales incentives and tax breaks and to increase institutional lending have met with limited success, since the average Italian is often unable to take advantage of the situation
2 – Prices are low, and still dropping in many areas
3 – The list of unsold property continues to grow
Whether for income purposes or as holiday homes and permanent residences, you see that the current home market definitely favors all those purchasers looking for places to invest. Not to mention its timeless charm and magnetism. Italian real estate is proving to be a rich mine.
So, what exactly is going on in Italy?
Where To Look For Property In Italy
As might be expected, home values have remained the strongest among the “usual suspects”, in areas such as Tuscany, Lombardy, and many of the larger urban enclaves, with prices for apartments and homes falling less precipitously than they have in the less populated rural regions. Even in the more popular zones, however, a national inventory surplus means that many asking prices are “soft”, and open to negotiation.
With an unsold inventory numbering around 540,000 units, suitable property in Italy isn’t difficult to find. Nationally, there are nearly 16 (15.78) properties for sale for every thousand listed in the Land Registry. Although there is a lot of property in Italy for sale today, the distribution is uneven. For example, the “per thousand” rates on “for sale” property range dramatically. Topping the list, at 26/1,000, are La Spezia and Trieste provinces, followed closely by Bolzano, Cuneo, and Cremona areas. At the opposite end there is L’Aquila, at 4.8/1,000, which is similar to the numbers for Nuoro, Frosinone, and Potenza.
More than a quarter (26%) of the unsold houses and apartments now on the market are basically new construction, which has put a damper on the building industry, but has also made for some enticing deals for shrewd foreign purchasers who are seeking more modern living accommodations or income producing properties.
Attractive Price Points For Property In Italy
People are usually suspicious when they hear the hackneyed sales pitch, “the time to buy is now!”, and it most often serves to put investors on a defensive alert, but, in the case of property in Italy, there is some definite merit to the statement. With inventories up, and with prices remaining depressed, it really is an ideal time for many foreign investors to make a move. Some economic studies have suggested that a potential turning point in the housing market may be on the near horizon, a signal that the free-fall of real estate prices may be coming to an end.
Since 2010, numbers reported by ISTAT (the National Institute for Statistics) show that prices for property in Italy have declined by 11.2%, with existing apartments and homes, rather than new construction, having been hit the hardest. ISTAT statistics point to further price declines through 2014, and the forecast for 2015 is still very much “up-in-the-air”, though the value disparity between new and existing properties is expected to continue.
But Standard and Poor’s, the respected financial services firm, is guardedly optimistic about the future of property in Italy, having revised earlier estimates of a 2.0% national housing price decline in 2014, halving that to a predicted 1% drop, and even indicating that the 2015 market could show positive movement, by as much as a full percentage point. As a matter of fact ISTAT has just released another study confirming a +1.3% in real estate purchase for the second trimester of 2014 after two years of negative signs. Also the government has just approved the so called “sblocca Italia” (unlock Italy) decree (decree-law no.13372014) including measures to improving the “rent to buy” formula. It now provides at the same time more guarantees and flexibility (you can extend the rental period up to 10 years) both to the owner to be and to the seller.
Even with some cautious confidence about the gradual easing of the European money market, credit and loan requirements are still very tight as far as Italian lending institutions are concerned. This will prevent many Italians from making large real property purchases, but this presents some real impetus for those non-Italian investors who are able to act now. In an uncertain economic climate, but one with a little more “light at the end of the tunnel”, this could be the ideal time to invest in a dream property in Italy.
