Property in Florence market gradually coming to life
The market for property and apartments in Florence is slowly stirring again – thanks to the reduction in prices over the past year.
With banks and the financial markets no longer the sure-fire bet they were considered a couple of years ago, investors are once more viewing bricks and mortar as a relatively safe haven.
Italian real estate agents report a definitive movement back into property and as a result, they say the first two months of 2009 have seen a resurgence of demand.
In Florence, property is becoming more affordable. Real estate values in the historic centre were down 2.3 per cent in the second half of 2008; in the city’s Poggio Imperiale-Bandino area 2.5 per cent; in the Campo di Marte district 2.8 per cent; in L’Isolotto 3.5 per cent; and in Novoli-Careggi 4.7 per cent. In the latter, demand is expected to rise again once the area’s new courtroom, currently under construction, is complete and makes the neighbourhood even more desirable.
Asking prices for property in Florence currently range from €6,500 per sq m for prestige apartments and villas to an average of €3,800-€4,000 for restored houses.
A report by Italian property conglomerate Tecnocasa spells out the countrywide figures in full. The past six months have seen a 3.2 per cent fall of prices of properties in Italy’s cities, while the past 12 months have registered a 6.5 per cent drop.
The fact that prices are coming down in a city as prestigious as Florence is good news for prospective property in Italy buyers.
For many Italian buyers, however, there is one stumbling block: the banks. Accessing credit has become more difficult for prospective purchasers and in some cases downright impossible, with financial institutions increasingly unwilling to shoulder the risks of lending amid a credit crunch.
Meanwhile, across Italy, top of most property-hunters wish-lists at present are two-bedroom properties, favoured by nearly one in three.
But buyers are becoming more cautious, with a consequent increase in the time it takes to conclude property purchase transactions.
At the end of the day, though, there is no getting away from the effect the credit crunch is having on home loan providers. In Florence, the number of approved mortgages fell three per cent in the three months to the end of September 2008.
Across Tuscany, the average figure is seven per cent. In some areas, lending has become even more stringent – down 20 per cent in Prato and 22 per cent in Livorno. Only Arezzo has bucked the trend with a two per cent increase.
And the future? Tecnocasa’s Tommaso Birignani remains cautiously optimistic. He says: “Much will depend on banks’ behaviour but a resurgence of demand is forecast, which is due most of all to the need for [financial] security.”