In line with the employment North / South divide, there is a definite difference in the two property markets.  The North has the more developed and higher paid employment opportunities, while historically the South has been the area for lower paid manufacturing employment.  As the country continues to leave behind the shadows of economical volatility of the last 40 years, the property market is now a different animal than back then.

While there has been a marked increase in house prices since the days of the 1970s when the country was experiencing net emigration, the market has been showing signs of slowing of late - in line with much of continental Europe. Today’s property market is almost unrecognisable from the 1970s when a volatile economic environment, and depressed economy added to the feeling of doom and gloom among many Italian residents.

Now one of Europe’s most popular tourist destinations, the domestic property market is heavily influenced by foreign nationals looking at relocating to the area, or taking out holiday homes.  As with a number of European destinations, the growth of the budget flight market has also widened the net for many foreign nationals looking at overseas property markets with a view to becoming Expats in Italy . 

Contents: Property Market Performance in Italy | Property Costs in Italy

Italian Property Market Performance

As the economic situation in the country has stabilised, and actually shown good growth over the last few years, many investors are looking towards the property market to diversify their investment portfolios.   This has helped to support and push ahead the property market which has shown good growth over the last decade.  

While prices have levelled off lately, with a rise of only 4% over the last year, this is not as bad as it seems when you take into account the potential decline in the worldwide economy.  As with most property markets there are a number of hot spots in the country, mostly located in the more developed areas of the North where incomes have historically been higher than the South.

There have been recent signs that investors may be looking a little further into the countryside, where property may not be as developed, but it can often be a lot cheaper than the main cities.  This is opening up a new market which many had not considered, offering the potential to widen the appeal of the Italian property market to those looking for more of a quiet life in the countryside.  

As interest in the wider property market develops, the difference between city property prices and countryside property pries will narrow, although the main cities will always be more expensive in real terms because of their transport links, employment opportunities and heavy interest from buyers.

Property Costs in Italy

As with any foreign land it is essential that you hire the services of a good solicitor who has experience in property purchase.  Property market rules in each country can vary greatly, and rather than be hit with excessive costs, or be on the end of costly mistakes, advice must be taken as soon as possible.

When purchasing a property in Italy it is very possible that you may pay in excess of 25% above the property purchase prices in fees.  The normal breakdown is as follows :-

10% for professional fees

10% for Property Vat

5% for connecting utilities, transfer fees etc

Up to 1% for mortgage fees

Capital gains tax is not normally payable if the property is held for 5 years or more.