Italy was hard hit during the global financial crisis and is now emerging from a period of financial and political challenges. The country’s property markets suffered and residential prices fell up to 30 per cent. However, after several difficult years, stability is now in sight. Transactions increased by 18 per cent in 2016, reaching their highest level since 2012, although they remain 39 per cent below their 2006 peak.
Stock levels are high in the prime second home market, creating a buyer’s market. Prices are around 30 per cent down from their 2008 peak and a greater willingness to price properties accurately has helped to increase sales. In the first quarter of 2017, the average discount on asking price was 12 per cent, in 2014, it was 16 per cent.
Most international buyers are drawn to Italy’s heritage and quality of life. Some 74 per cent of buyers favour historical properties and those renovated to a high standard are most in demand. Views and easy access to a town top buyer’s wish lists.
Europeans comprise the bulk of international buyers. Germans and Swiss are particularly active in the north of the country (where recovery has been strongest), while Dutch, Belgians and those from the Nordics are buying too. In spite of Brexit uncertainty and a weak sterling, British buyers are still present, some actively seeking euro-denominated assets. Americans, encouraged by the strong dollar, are a growing force.
With national elections to be held by spring 2018, political uncertainty remains, but the economic outlook is improving. GDP growth estimates have been revised upward, industrial output is rising and tourism remains buoyant, all good news for the short-let market.
Rising transaction levels will reduce high levels of stock. Prices could stabilise next year, led by best-in-class properties. The prime markets could be further stimulated following the introduction of new incentives to attract High Net Worth Individuals to Italy.
Read more Savills Spotlight: Italy 2017