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. There are two options, one is to purchase while the other is to rent property. You can find the best ones if you look closely. An expat shared advice on the topic in a post at the Italy Expat Forum last December 1, 2008:
The best – indeed, the only sensible advice to give is to look at the offerings of several agencies for your property. Talk to them in person and agree the commission charge they will make (it should be less than 3%). If you agree and feel you can trust them, look at the properties they have on offer and check the prices that other agencies are asking in the same area.
If you find something you like, find a notario that is not related to the agency, nor recommended by them. The notaio will look at the details of the property and check the legality of the property (the word you do not want to hear is “abusivo”*).
After you have agreed in principal to buy, you might then find an architect or (more cheaply) a geometra (surveyor) to look at the property for structural problems and ideas for how it might be restructured to comply with both the law and your tastes. He may give you an idea as to what the likely costs will be as well – although, do not take these costs as fixed costs at all.
Above all, check the legality of the property before making an offer though. A broken building can always be restored, an illegal one could be pulled down!
*Ancient Properties describe this as “systems in norm”. Be very, very wary of the answer being “no”.
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 that has shown good growth over the last decade. Even with the http://www.propertycommunity.com/emerging-property-markets/319-property-market-italy-stable-growth-expected-2010.html onslaught of the current financial crisis, the Italian property market has been able to weather the storm.
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. This is clearly seen in the http://www.propertycommunity.com/emerging-property-markets/271-property-investors-in-italy.html current trend of having expats seek out holiday rentals instead of actual purchases.
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.
An expat further shared other hidden costs which may occur, in a post at the Italy Expat Forum last June 27, 2009:
I don’t know the answer to your query for sure, I bought a place rather than renting, but the guy we bought it from was also letting out his place next door long term. I think many Italians are very flexible about this sort of thing – one of our new neighbours offered me an apartment to buy or rent so I think it would be worth finding an agent with property to sell and asking them if the owners would like to rent out long term instead. If you speak Italian the best way is often to ask in the coffee shops/bars local to where you want to be. The owners alway know what’s going on locally.
Sorry I can’t help more than that, but maybe now there are replies on here some others will come and have a look and give their views.
If you aren’t into purchases, rental properties are also an option as there is a wide variety of offerings to choose from all year round.