An update on the Italian real estate market and predictions for the rest of 2019
The Italian real estate market is often frequented by buyers who are determined to invest, despite the current state of said market. Nevertheless, similarly to any other country, the trends and trade in property are affected and determined by economic, living and political conditions, after the prolonged postponement of the formation of a new Italian government in 2017, levels of confidence in the market are rising in 2019.
This trend can specifically be tracked in Tuscany, where during the last 10 years, prices declined 40% in peak-to-trough terms. However, we are now witnessing the stabilization of prices, prominent cities such as Florence and Lucca both recording 1% growth in 2018. We can satisfy any request, from the apartment in the city center to a big villa/rustic farmhouse within nature, from the beach house or the mountain cabin.
Comparing Italy with other European countries growth both in pricing the first one remains lower than the average making Italy an ideal spot for affordable investments.
Furthermore new tax measures were launched by the Italian government, aimed at boosting the property tax within the country as well as removing multiple bureaucratic barries. This will not only make the process of investing easier for foreign investors but provides further good news for those with hopes of owning a property in italy.
High numbers of international investors throughout the past year hailed from the UK, America, and Germany, with the most popular areas becoming the lakes and northern Tuscany, and Puglia, according to Italian real estate market research. Past economic data shows the prices have remained fairly stable and affordable in these areas when compared to major Italian cities and metropoles, in which prices are increasing rapidly.
In line with the economic recovery, rents and yields on housing have risen because the economic conditions of Italian society and the labour market have increased the number of people renting their main residences. In 2019, housing demand is set to be increasingly oriented towards rentals by young people and those who want more flexible living and working conditions, including mobility, services and cost reduction.
Through this Italian cities such as Bologna, Naples,Turin and especially Milan and Rome will become attractive areas for real estate investment.
A key trend in Italian property continues: no longer is one single region or area preferred by non-Italian buyers, but the quest for ‘new’ undiscovered areas that are less touristy and offer a more authentic Italian lifestyle is key. As well as milder weather, lower property prices and living costs, some regions are now offering retirees favourable income tax rates. For the first six years of residency, the flat rate tax of 7% on foreign income, will benefit eligible applicants moving to villages with less than 20,000 residents. The central and southern regions it applies to are Sicily, Sardinia, Campania, Basilicata, Abruzzo, Molise and Puglia. The government hopes that the scheme will attract people who have the economic resources that will positively affect the economy in these regions.
It seems that whatever political instability affects Italy, the Italian property market will always attract investors buying into the unique food, landscape and lifestyle of Italy.
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