Are more people coming to live in Italy from other countries? Is the economic crisis a potential obstacle? What are the reasons for foreigners buying property in Italy? John Bensalhia investigates...
All over the world, the TV channels seem to suggest that people like to up sticks and begin a brand new life in another town or even another country. There are variants of the same format on TV – in Britain, this happens to be A Place In The Sun or Relocation Relocation Relocation. What happens is that a couple, aiming to embark on a fresh chapter in their lives, enlist the guidance of TV property experts who proceed to whisk them off to foreign shores where they can look round a selection of properties which may or may not be to their liking. In these sorts of programmes, the outcome is generally a certainty – it's a happy ending, as the couple agree to move to a foreign country and fall in love with the property of their dreams,which not only ticks all the boxes but at a far cheaper price than they could have ever imagined.
It's not just a TV dream though. It would seem that places such as France, Germany and indeed Italy seem to attract interest from overseas property buyers. A recent survey would seem to bear this out. The Rightmove Overseas Index found that 56.2% of indexed locations saw increased numbers in searches, with an overall search figure for overseas property rising by 15% in May 2011. In the same month, it was found that 17 out of 20 Italian regions saw higher user activity. Recent data collated from the ISTAT census at the end of 2009 also found that the number of UK nationals living in Italy was 29, 184.
It's not just British people living the dream in Italy. Americans. Canadians. Australians. It appears that a number of factors have attracted property buyers from all around the globe. So what are the factors behind the overseas property investments? One obvious reason is the sort of lifestyle that people would love to experience. Italy is renowned for its emphasis on culture. People visit Italy on holiday to sample the arts, the architecture, the history, the food and all the sights that they could ever wish to see. It's a country that scores highly on tourism with over 43.2 million visitors a year.
However, while people come to see the obvious tourist attractions such as the Leaning Tower Of Pisa, the Colosseum or the Trevi Fountain, it's the smaller details that they also end up falling in love with, such as the vineyards or the olive groves. People look to move somewhere, whether they are retiring or whether they want a change in pace of life, and so Italy can offer that tranquil lifestyle. And with 2,356 hours of sunshine a year, this also may be a factor for people looking to leave behind gloom and doom...
But whereas the heart can sometimes rule the head when it comes to property, with Italy this isn't just the case, since there are many practical reasons for overseas property buyers. And as with most walks of life, it all comes down to money. Italy boasts greater value for money with cheaper property prices and a stronger currency exchange rate. A quick look on Italian property websites seems to bear this out.
A property in Marche with six bedrooms and two bathrooms costs €235,000 – costs in Britain for this sort of property are variable, but are considerably more. Even an apartment in Tuscany at €170,000 would be cheaper than the same sort of property in London. So it's the price that plays a part in luring overseas property buyers, even with the additional taxes that need to be paid on Italian homes (for example, Imposta di Registro – registration tax payable on a property changing registered ownership; Imposta catastali – a cadastral tax levied at 2% of the property value; and Imposta ipotecario, a government tax charged on any loan or mortgage secured on an Italian property).
Italian property is also seen as a relatively safe investment, even taking into account the fragile global economy. Although it's worth pointing out that even if property prices had fallen badly in Italy, this would have been a great opportunity for first-time overseas buyers looking to snap up a good deal. However, property prices have not fallen as drastically as feared, and contrary to these fears, the Italian housing market shows signs of stability. Global Property Guide research declared that Italy did not experience large price falls (as opposed to some other European countries). While numbers rose more than 70% from 1998 to 2008, since then, the drop has only been 0.3%, year on year, to the first half of 2010. Similarly, an independent economic thinktank, Nomisma, also predicted that house prices in 13 major Italian cities would stay stable in 2011. A survey conducted by the Bank of Italy also gauged the reactions of a sample of real estate agents – the majority either predicted that the Italian housing market would either improve (61%) or remain stable (26%). With these relatively positive findings in mind, overseas property buyers would regard the Italian housing market as a safe, good investment.
Some overseas property buyers also opt for renovation projects in Italy. Because the cost of renovation is lower than in other countries, this is a major draw for people who are looking to get a return on a property investment. At present, Italy is also a popular choice for renovation since there are less opportunities in other countries such as France. Renovators have the opportunity to either sell their houses at a profit or lease them out to holidaymakers – areas such as Calabria are good for beach properties, and thanks to good value flight costs as well as the high tourism rates, property
renovation in Italy is seen as a very shrewd investment indeed.
Even with the shaky economic climate, overseas property buying is still regarded as a worthy investment. Whether overseas buyers want to take advantage of the value for money and the peaceful, tranquil lifestyle or whether they want to renovate a property for financial profit, Italy offers benefits in abundance.