A recent report on the Italian coastal home market shows that rental demand remains strong, particularly thanks to overseas tenants
Renting is up, buying is down. This, in a nutshell, is the main finding of the latest report from Italian estate agent conglomerate, UBH, which examines the market for second homes along the Italian coastline.
The company’s researchers found that coastal home sales went down by an average of 20% last year, with peaks of up to 30%. This is having an impact on prices, which are going down by as much as 5-7%, especially in Central and Northern Italy.
That said, the picture is slightly more complicated than this topline analysis suggests. Prestige second homes in good locations have kept their value or even see marginal increases in the region of 2-3% throughout the country. And both demand and prices for seaside homes in Southern Italy remain strong, partly thanks to foreign buyers who keep flocking to resorts in Puglia, Calabria and Sicily.
What is really going strong, however, is the rental market for waterside properties. Both last year’s figures and this year’s forecast show that second home rentals in coastal resorts are proving very resilient to the crisis. Prices are stable—but then, points out the UBH report, the great leap forward in rents took place between 2005 and 2007—and demand is extremely robust.
Among the factors that explain this is the increasing number of foreigners looking to rent a second home on the Italian coast. Low cost airlines have opened up new Italian destinations such as Le Marche and Apulia, to foreign holidaymakers. Better communications are also helping draw new tourists from Eastern Europe—particularly Russians, Bulgarians, Polish and Hungarians. In addition to this, the shock of the switch from a weak lira to a strong euro has finally been absorbed, bringing back traditional short let tenants, such as the Germans.
Not only is overseas demand strong, but budgets are also considerable. Nearly 40% of the prospective tenants are looking to spend between €700 and €1000plus per week. At the very top end of the market, people are prepared to part with as much as €4,500-5,000 per week for homes on Sardinia’s Emerald Coast, in Tuscany’s Versilia, or in Portofino, Capri, Panarea or Lampedusa. And since many foreigners take their holidays as early as June and as late as September, their growing presence is lengthening the Italian summer rental season, which was traditionally limited to July and August.
The most popular destinations with foreigners are the Adriatic Riviera, Tuscany and Sardinia but southern Italy is also gaining ground, with great interest in the traditional resorts of Sicily and Campania, but also upcoming ones in Puglia and Calabria. Germans and Eastern Europeans in particular favour the Adriatic Riviera, while the British prefer the Marche and Abruzzo resorts.
Italy’s five most expensive seaside locations
To buy
Portofino, up to €18,000 per square metre
Capri, up to €17,200 per square metre
Forte dei Marmi, up to €15,500 per square metre
Santa Margherita Ligure, up to €12,000 per square metre
Porto Cervo, up to €11,500 per square metre
To rent
Portofino €2,500/week in August
Forte dei Marmi €2,200/week in August
Capri €2,000/week in August
Porto Cervo €2,000/week in August
Porto Ercole €1,800/week in August
And the five cheapest ones
To buy
Manfredonia, from €1,100 to €2,000 per square metre
Santa Cesarea Terme, from €1,000 to €2,100 per square metre
Castro Marina, from €1,300 to €2,500 per square metre
Lido Scacchi, from €2,000 to €2,500 per square metre
Vasto, from €1,900 to €2,600 per square metre
To rent
Manfredonia €600/week in August
Vasto €650/week in August
Fano Lido/Sassonia €650/week in August
San Benedetto del Tronto €750/week in August
Santa Maria di Leuca €800/week in August
Top five regions among foreign tenants
Adriatic riviera
Tuscany
Sardinia
Liguria
Puglia
