Italy has really suffered since the market crashed in 2008 and house prices still continue to fall, a trend which has been in place for almost 5 years. The house price index fell by 6.54% in 2013 and when this figure is adjusted for inflation the figure changes to 7.58% – however if you look more closely, there are still opportunities for investors in the Italian property market.
The current Italian property market is soft and in the next few years there is likely to see more investors deciding to buy property in places such as Milan, Rome and Calabria. However, property prices are likely to rise in 2014.
This means that the time could be right for foreign investors to show some interest in the Italian real estate market by making lucrative investments. Italy saw cross border investment totals sitting at 3.6 billion euros in 2013 which was an increase on 2012. This came from North America and Europe mainly with the rest being invested by the Middle East and Asia. Many developments have been bought by Qatari investors and the trend for this kind of investment is certainly looking to continue with almost 50% of the 700 million Euros spent on commercial property coming from foreign investors. Whilst Italy might be facing problems internally with its economy and unemployment, it is still seen by many in Europe and around the world as a very desirable place to holiday or retire too, due to the country’s fascinating blend of history, architecture and culture.
However, those investors looking at purchasing property for an immediate return on their investment are looking to at purchasing property for sale in Calabria and Milan as there are price reductions of up to 20% on real estate which is luring investors from all over the world. Despite fluctuations in the market, Italy is weathering the economic downturn surprisingly well, especially when compared with other countries around Europe, including Greece, Spain and Turkey.
Due to Italy not borrowing high amounts or as much as their European neighbours, they were not as badly affected as many other countries and the tourism industry has helped to keep the countries economy above water. Now popular destinations are seeing enquiries from large investors from all over the world – whether it be for city living and retail therapy in Milan, or a quieter and more scenic lifestyle by the coast in Calabria.
Italy took an initial knock in the volume of sales in 2009 but the recovery has begun and interest has been shown in many villages and towns throughout Italy. The drop in prices has been a huge attraction for the investors but there is also a tax regime in place that means foreign residents only pay taxes on Italian income which is great news for investors. Many countries now adopt a ‘golden visa’ policy for investors which helps to attract property investors from overseas, as it gives investors a temporary visa to stay in that country. This can differ from country to county and can apply to a variety of investment purchases, but property seems to be the biggest overseas purchase to activate the ‘golden visa’ system.
Also investors can be encouraged by the fact that if the property they invest in is not sold on within five years, they are exempt from paying capital gains tax. This means that property in Italy is certainly something that investors should take a look at. Many developments have been halted and many excellent deals can be had which means Italy has never looked so appealing to investors.