UK and US buyers are increasingly looking to Italy to buy property. According to Robert Fawcett, a partner in Knight Frank’s Italian team, Italy’s traditional treasures – food, culture, wine, architecture – continue to attract overseas buyers.
Italy is still struggling to free itself from the after-effects of the 2008 crash and the Eurozone debt crisis, but a weak Euro has actually helped to bring in foreign buyers attracted by favourable exchange rates. ‘Italy continues to face challenging market conditions with Europe again coming under the spotlight recently over its muted economic growth and with some of Italy’ banks faring badly in the latest stress tests,’ Mr. Fawcett said.
However, he has noted increased interest this year in homes in italian cities and especially an improvement in activity levels in Venice, Milan, Florence and Rome. ‘Rome has returned positive growth in the last quarter,’ Mr. Fawcett points out, ‘for the first time in several years. Venice is showing increases at the upper end and all cities have seen increased sales activity.’
Across the world there is a tendency for splits to develop between the rural property market and large cities, with stagnation in one and high growth in the other. Additionally there is a split within cities between luxury properties and other classes of property. That pattern is repeated in Italy. In rural areas, there continues to be downward pressure on prices coming from a large available stock, which tends to result in buyers deliberating for longer when searching for the perfect property.
In rural areas where pricing takes into account market conditions, there’s often no shortage of buyers, sometimes including multiple offers simultaneously, but where vendors are not flexible as to price they’re often left out in the cold.
While UK and US buyers have begun to enter the Italian market, Russian buyers have been less interested. There has particularly been a decline in Russians interested in property above the €5m mark, especially in the traditional retirement areas like Tuscany and rural Sardinia. However, Russian interest has revived at lower price points in areas like Liguria.
The influence of US and UK buyers has increased as both the pound and the dollar have strengthened against the Euro. British buyers tend to favour properties in Tuscany as well as in Florence and Umbria, while Americans are more interested in the Italian Lakes, Rome and Sardinia.
And there’s another set of buyers from outside Europe involved in the Italian market, says Mr. Fawcett: ‘We have already seen rising interest for both commercial and residential property from China and other Asian markets. Another sector attracting increased demand is the semi-commercial vineyard market (more than hobby wine, but less than industrial), with buyers seeking a holiday home that they can also find some commercial output from.’
The Italian market has suffered in recent years, with other European countries – including Switzerland – overtaking the once-favourite destination in Brits’ eyes. But it looks as though Italy might be staging a comeback, driven by its traditional appeal, currency differences and changes to the Italian Land Registry laws.
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