Italian property remains a buyers’ market
For Italian property bargain hunters the market has seldom been more affordable.
Prices of property in Italy in the first half of 2008 were seven per cent down compared with the same period in 2007, a report reveals.
In Milan, Naples and Palermo the drop was nine per cent, with Rome on 8.3 per cent.
Canny Italian property buyers have been quick to make the best of the favourable market conditions by negotiating an average 17 per cent off the asking price of houses in Naples and 14 per cent in Rome.
It follows an earlier report from forecasters Nomisma showing discounts of up to 15 per cent in southern Italian cities.
But there is some good news for people who already own property in Italy and are naturally concerned about its maintaining its value.
Researchers from Italian property group Ubh point out that it is only homes on the outskirts of towns and cities that have seen a drop in value. In town and city centres values have remained broadly stable.
Prices of new-build property in Italy have also remained steady as demand in this sector has stayed robust. And where there has been a price drop on the edges of towns and cities, Veneto appears to have fared best, with Padua, Venice and Trieste showing the smallest price declines.
More affordable prices are an obvious sign of the global credit crunch beginning to make its mark on the Italian property market.
It has made Italian banks even more conservative in their mortgage lending policies than usual, bearing in mind they have always tended to be more stringent than financial institutions in Britain and the US.
The consequence, Ubh believes, is likely see the number of Italian property units changing hands in 2008 diminish by between 13 and 15 per cent to around 700,000 – levels last seen seven years ago. It would be the first fall in sales volumes in around a decade.
Research head Alessandro Ghisolfi also pointed out: “It is the first time after many years that witness a contraction so homogenous in prices of used property in the Italian residential market.”
However, he believes the change in prices and volume properties sold will bring about a more sensible balance in the Italian property market in 2009.
He acknowledged sales volumes would settle closer to levels seen in the 90s “after the euphoria of the last few years”, but added: “It will be a year of looking for a new equilibrium, which will not inflict damage on the market.”
Other leading cities in the Ubh report that have also seen a drop in house prices include Bologna, Catania, Florence, Genoa and Turin, all down by six per cent compared with the first half of 2007.
Earlier this year a separate report by Nomisma found a 2.1 per cent rise in prices of property in Italy over the first six months of 2008, but the comparison was with the second half of 2007.