The Italian property market: a great time for buyers
There has rarely been a better time to buy Italian property, a new report reveals.
The worldwide credit crunch has seen buyers knock a massive 12.2 per cent off the asking price of a typical Italian property for sale.
In parts of southern Italy, that rises to as much as 15 per cent. The typical new-build property in Italy sold at 5.1 per cent less than list price. And prices are set to fall even further in real terms for the rest of 2008, according to Italian economic forecasters Nomisma.
Fabrizio Giglioli of Italian property finders The Property Organiser said: “There have always been bargains in Italy if you know where to look, but the current economic climate has made this as strong a buyers’ market as I can remember.”
The first half of 2008 saw values of property in Italy go up by a mere 2.1 per cent from the latter half of 2007 – the slowest rate of growth since the late 90s. Factoring in inflation, it means real values rose by a paltry 1.1 per cent, Italian economic experts Nomisma point out.
In tourist hotspots such as Venice, Milan and Bologna, real prices are already tumbling, the Nomisma report says, with other areas across Italy expected to show a similar trend in the final six months of 2008. It forecasts: “Nominal prices will remain steady…and real prices will decline in line with the inflation rate.”
However, the Italian property market is likely to experience only a gentle sloping off of prices and is in a better position than other EU countries to handle the slowdown because it did not have the same kind of unrestrained boom in the late 1990s and early 2000s.
As a result “the readjustment is expected to be far less traumatic”, the Nomisma study says.
The typically lower debt levels of Italian consumers and banks’ conservative mortgage-lending rules should help avert a US-style repossessions crisis and ensure the economy is better placed to weather current conditions, Nomisma adds.
But declining Italian property prices are not the only signs of the difficult market conditions. Fewer than two per cent of Italians say they are likely to enter the market this year.
It is the kind of caution that has seen Nomisma predict a 10 per cent fall (around 80,000 properties) in the volume of sales this year ‒ figures last seen in 2002. That equates to a corresponding drop in monetary terms from €123billion last year to €110billion this.
The figures come after 2007 saw a near five per cent drop in sales volumes compared to the before. Buyers’ reluctance to enter the market means the typical Italian property purchase now takes more than five and a half months to complete, up from five months in 2007.