Italian property: Milan defies the slump

February 18th, 2009 | by Ainsley |

Being the fashion capital of the world means Milan always remains in demand.

Property prices in the city – the new home of soccer idol David Beckham – defied the worldwide slump to rise 0.4 per cent in 2008, according to a joint study by Milan’s Chamber of Commerce, its property market arm Osmi and estate agents’ body FIMAA. Crisis? What crisis?

The figures, drawn from the EC’s Eurostat body, show prices have been rising steadily in the city for five years, although last year’s (understandably) modest increase was a fraction of the heady days of 2004, when they soared 10 per cent.

Milan has also been named as Italy’s most expensive city in which to rent – news that will undoubtedly appeal to investors looking to buy property in Italy’s fashion capital.

At present a 50sq m attic-style property in Milan typically goes for around €1,150 a month, compared to €1,020 for such a property in Rome.

However, if you have a similarly-sized apartment, the typical rental income is slightly better in Rome than in Milan (€1,100 compared to €940) while the same holds true for lofts (€900 instead of €860)

By way of comparison, owners of identical property in Florence could expect to get €1,000 for a loft and around €820 for an apartment or attic.

Perhaps surprisingly, bottom of the rental table is currently Venice, with the average 50sq m apartment fetching just €747 a month.

However, given the effect that the current worldwide economic conditions are having on property prices there has scarcely been a better time to buy.

As ever, the same common sense advice holds true, especially for foreign investors unused to the process of buying property in Italy: don’t sign anything without expert legal advice.

One aspect that hasty buyers sometimes overlook is the issue of whether any large-scale construction is planned for the area. The last thing you would wish is to buy a house or flat and then discover that a dual-carriageway is due to be built 50 yards away. Again, a competent lawyer should carry out such checks beforehand to ensure there are no nasty surprises further along the line.

The Milan Chamber of Commerce would now like to see a new type of standard contract to safeguard both sides in a property purchase.

Chamber advisor Lucia Moreschi said: “The housing sector is very important, in terms of economics and the growth of an area and is linked to the quality of life of its inhabitants.

“The Chamber of Commerce is now proposing a new type of contract to protect consumers and businesses, to increase clarity and transparency in a meaningful manner.

Osmi president Antonio Pastore argues that regardless of the current housing market turbulence, the sector will always play a crucial role in the economic wellbeing of Milan and the rest of Italy.

He said: “After a decade characterised by significant increases, we now face a reversal of the trend. That the property market is going through difficult phase is confirmed not only by current prices but also by the contraction of sales. However, the need for housing remains strong and represents a crucial part of the budget of the Milanese.”

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