Words by Pat Eggleton
Italy’s Agenzia del Territorio, which monitors house prices, reports that the 2009 housing market was steady.
Although there were less house buying and selling transactions than in the property boom of 2002 – 2004, there were 2.4% more transactions than in 2008. Residential property has been less hard hit by the recession than property in other sectors.
By the last quarter of 2009 business had increased in every property sector but especially with regard to industrial and commercial properties. Geographically, Northern Italy saw a slight drop in residential sales but the Centre and the South saw an increase, especially in cities.
Property values have risen by 28.7% since 2004 and are now more or less holding, with a drop of only 0.7% in the second half of 2009. Again, the South is performing better. One reason for the slight fall in values may be Italy’s ageing population, a problem which can only be solved by immigration.
Another reason is that mortgage-funded property purchase is less common in Italy than in other EU countries, with the mortgage market comprising only 20% of GDP as compared with the 50% EU average. Lower interest rates, it seems, have only made Italians more cautious. This is good news for the potential foreign buyer as it is a situation which encourages stability in the market.
A study by the Italian estate agents’ organisation FIAIP and the economic intelligence agency NOMISMA found that the second home market is holding.
There are over three million second homes in Italy, mostly purchased by Italians, but smaller homes do attract other Europeans. Second home prices are expected to rise only slightly in 2011 with prices being higher on the outskirts of cities. Second homes would normally be defined as smaller houses by the sea or in the countryside where it would be impracticable or inconvenient to live all year round.
The most sought-after region is Tuscany and the most expensive is Veneto. The Daily Mail reports that low-cost airlines are also having an effect on property values, as their destinations are creating new property “hotspots” around cities like Turin and Cagliari [Sardinia].
In general, house prices in Italy are expected to fall by 1% in what remains of 2010 so property in Italy is not going to be ridiculously cheap in the near future but it is still a buyers’ market.
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