Property in Italy: a forecast for 2009
Prices of property in Italy will come down by another five per cent over 2009, Italian real estate experts Nomisma predict.
Italian property prices were down one per cent over the second half of 2008 compared to the first half of the year as the Italy real estate market showed it is not immune from the turbulence sweeping through the world.
One reassuring fact, however, is that the fall in the value of homes in Italy has been merely a fraction of the 5-10 per cent plunge in other major European countries.
However, the figures are another sign that buyers increasingly hold the whip hand in the Italian property market.
Nomisma chief Gualtiero Tamburini points out that the drop in values for the second half of 2008 was the almost inevitable consequence of “a trial of strength between a few buyers and numerous sellers”.
That is a trend he expects to continue well into 2009 – with the situation amplified in major cities, tipped to see a realignment in values of around eight to 10 per cent.
The second half of 2008 has already seen large conurbations, particularly in northern Italy, endure much steeper reductions than the one per cent average. In Milan the figure was 2.5 per cent and in Bologna 4.5 per cent.
But although homes in Italy are coming down in cost, in the commercial office and shop space sector they are tipped to remain stable.
One key finding of the Nomisma report is – with a few exceptions – a north-south divide in 2008 prices. So Catania saw a 0.1 per cent increase, in Palermo it was 1.2 per cent, Bari 1.9 per cent and Cagliari 3.4 percent.]
In contrast a number of northern cities saw declines, including Padua (0.1 per cent), Rome (0.7), Turin (1.5) and Florence (1.9). But the sharpest fall came in the southern city of Naples, a 19 per cent decline.
Nomisma blames the difference on the boom in property prices in the north. Analyst Luca Dondi says: “The markets of northern-central Italy, above all Milan, Venice, Florence and Bologna, have had highly accentuated rates of growth and prices there have reached unsustainable levels, therefore demand is falling away.”
But he does not expect prices for real estate in Italy’s southern regions to defy the trend in definitely. Dondi adds: “However, in the south also, the data herald a fall in prices that we forecast for the first half of 2009.”
In addition, Nomisma also reports a one per cent tumble in the number of new-build properties in Italy and expects the figure to hit 1.5 per cent next year.
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