Italian Property Market Expected To Make Amends Soon
Prices of residential properties in Italy have dropped by around thirty per cent since Q2 of 2008. However, the luxury property industry has proved its resilience despite the current crisis, according to Knight Frank’s latest insight report. Prices have fallen by around twenty per cent in some of Europe’s luxury real estate markets.
The Euro’s decline as a currency in the first six months of 2012 is identified as the factor responsible for provoking interest in the continent’s real estate from an increased number of buyers from outside the Eurozone. Demand for Italian properties that are worth more than three million Euros is strong, and nationals of some European countries are in the mix for good deals.
Sardinia and Venice attracting plenty of interest
The Global Property Search site of Knight Frank generates over 700,000 hits each month, and a search analysis undertaken between the first and eighth month of 2012 showed that Venice was second to Sardinia in terms of experiencing a rise in real estate searches. When compared with the January-August period in 2012, real estate searches by non-EU citizens increased by around 25 per cent. Homes worth 3.8 million Euros, on average, were the most sought after during the period.
Umbria and Tuscany were the main regions of Italy to attract searches from potential foreign investors. In fact, a stunning 84 per cent of real estate searches were related to homes worth more than five million Euros in the two regions. The other regions of the country, however, are experiencing a fairly even share of interest, with 55 per cent of the searches being tied down to properties worth less than five million Euros and 45 per cent relating to homes worth more than five million Euros.
Growth expected, albeit marginal
Before the real estate bubble burst, prices of prime Venetian properties were a tad inflated, which means that real estate values in Venice have further fallen since 2007. Compared to January 2012, prices have now dropped ten per cent, and around thirty per cent since the financial crisis hit Italy. Knight Frank’s head of global residential research team, Kate Everett-Allen said that although it may be marginal, there is scope for price growth in the remaining months of 2012. She explained that foreign investors are continually targeting the famous areas of Dorsoduro and San Samuele, with European and local Italian buyers dominating these charts.
Locations in Tuscany such as Val d’Orcia and Chianti have been attracting interest from an eclectic group of investors, according to the report. Strong interest is also shown in Tuscany’s Castelfalfi development. The prime property market in Florence has been lethargic in 2012. However, a counterbalance is struck due to the flourishing villa market in the perimeter of the Florentine hills. The Niccone Valley in Umbria, which is located nearby the Tuscan border, has also attracted a lot of interest, especially from investors from the north of the continent. The country, as a whole, is in for better times in the months to follow.