24 Jan Italian Real Estate Outlook : Is now the best time to buy your Italian dream home?
*Update for coronavirus: January 2021:
At time of writing, it’s clear the pandemic has disrupted all markets throughout 2020 and simply significantly reduced the possible real estate transactions in Italy. Indications are that transaction volume fell by 14% from 2019, according to the Italian Revenue Agency, and although prices fell in the cities prices rose in regional areas as people searched for larger family spaces in quiet areas.
For the first 9 months of 2020 “non-capital municipalities grew most of all, by +8.1%, compared to an overall price decline for the capital city municipalities, (-6.7%),” according to a Gabetti Studio and Patrigest report.
(previously Updated January, 2020)
[Jan 2020] Italian real estate market
The Italian real estate market has been struggling for years and has been further impacted by the financial crisis in Italy. Thanks in part to historically low interest rates, the market indications point to a “bottoming out” of the overall market in terms of prices although in some urban areas like Milan, home prices have recovered well. From this point of view, this may be an excellent time to buy your dream home in the Bel Paese. Investing in that villa in the Tuscan countryside or apartment in the Cinque Terre is that much more affordable and accessible to overseas buyers.
The number of property sales continues to increase
The number of real estate deals in the residential sector has been steadily increasing and according to the Italian Revenue Agency, completed deals were up 8.8% in the first quarter of 2019 compared to the same period in 2018. This continues the general upward trend in quantity of sales since 2014.
Genova showed the greatest growth, +15% followed by Bologna, +12.9% whilst both Rome and Milan show above the national average growth with both cities reporting greater than 11% sales growth.
Current property values indicate Italy continues to offer value
Although sales volume is recovering, in 2018 the value of real estate fell by 5%, as per the Notary Statistical Data Report presented by the Notary’s Observatory. Prices are still well down compared to market values in 2011 and since the onset of the economic crisis in 2008.
As a result, Italy currently offers some of the best real estate deals in Europe.
Pound Sterling strengthening against the Euro
The British pound has been undervalued against the Euro since the Brexit referendum. The average exchange rate during 2019 hovered around GBP1 : 1.12 Euro however at January 24 the rate was almost 1:19 euro. Economists have widely suggested that post-brexit the pound is expected to recover, potentially offering greater purchasing power from UK property buyers coming to Italy, whose incomes are in Sterling.
The USD is currently buying 0.90 Euro cents which is close to the highest level of 2019.
The Italian real estate market has yet to recover from the economic crisis and this means that investors from around the world seek value both in areas that are traditionally very popular with foreigners like Tuscany, Puglia and Lake Como, as well as some lesser known but equally beautiful areas such as Sicily and Le Marche.
Whether you have already found a property and are ready to make an offer, or are just beginning your search, D&G Property Advice can assist you in realizing your dream of owning a home in Italy.