Real
estate is still relatively cheap in Italy. Although Italian
property prices are rising, (prices rose by 5.1% in 2007)
they are still cheaper than the UK.
Prices
of holiday homes are still rising. There are now seven tourist
towns in Italy where a square metre of property costs more
than 10,000 euros, compared with five towns last year. The
top ten most expensive tourist areas to buy in Italy are
all either on the seaside or in ski resorts.
The
market for foreign buyers has shown considerable growth
in the last decade because of better Internet marketing
by estate agents in Italy and cheap flights offered by budget
airlines with vastly improved access to more regional airports.
Generally
speaking, demand outstrips supply, so there are more foreigners
looking to buy specific kinds of desirable property (on
the coast, in the mountains, farmhouses) than properties
for sale.
Italy
enjoys a wonderful reputation for its climate, its excellent
food and lifestyle. For these reasons and more, it is an
enduringly popular holiday destination, particularly with
buyers from northern European countries, such as Germany,
Switzerland, Holland, Denmark and Russia.
There
is a wide range of properties available with good investment
potential, from village houses, coastal apartments with
ocean and views, simple rusticos requiring restoration to
new apartment complexes, renovated townhouses and luxury
villas.
The
large numbers of tourists that visit Italy every year ensure
a rich supply of rental clients should you buy a property
in a tourist area. Italian holiday-makers will also be interested
in renting coastal apartments and mountain homes during
the summer months of July and August.
Reasons
AGAINST investing in Italy Property
The
pound has been slowly but steadily decreasing in value against
the euro over the last five years. This means you can’t
get as much for your money as you could five years ago.
Consider
carefully where you’re buying to maximise rental potential
– consider the presence of an international airport
for instance.
Tracing
all the owners of a rural property – especially generations
later – can be a complicated and time-consuming process.
A rural
property can easily have more than five different owners,
and if you have to buy from five owners, you have to pay
costs on five separate acts of purchase. You also have to
be sure that all the owners come together on the same day
to sell to you on the same day, and that they are all agreed
as to the price.
Renovating
old properties is costly. It can cost around 1,000 -1,500
euros per square metre of renovation, depending on the level
of fixtures and fittings you choose. A rustico that only
cost 30,000 euros to buy may end up costing you 200,000
euros to renovate.
Not
everyone speaks English.
Corruption
is rife in Italian society. Stifling taxes and bureaucracy
have encouraged people over the decades to find ‘alternative’
ways of getting things done. However a foreigner will not
find it so easy to tell the difference between ‘alternative’
and just plain illegal. You could easily misjudge one type
of corruption for another and end up falling foul of the
law.
It
will cost you a lot of money in Capital Gains Tax if you
sell within five years, so Italy is not a get-rich-quick
property market.
