Many aspects of our lives have changed due to recent events; since the beginning of 2020 the global economy has been suffering, and the outbreak of Covid -19 has worsened the economic situation in many countries. In Italy, for instance, the economic situation was already fragile prior to the outbreak of the health emergency, and the safety measures and subsequent lockdown that were pursued by the government had a considerable impact on the country’s financial situation, placing it among the EU countries that suffered the most. Some sources have predicted an economic crisis which will be characterized by a reduction of our purchasing power and a general increase in costs; this means that the Italian real estate market might also be affected.
You might ask yourself: is this a good time to buy in Italy? The Italian real estate market is very competitive on an international level and in recent years it has attracted many foreign investors. On a domestic level, big cities are being developed to improve the overall quality of life, and government-fostered incentives and tax benefits (read our previous article) are reassuring buyers and sellers about the possibility of what Italians literally refer to as “investing in bricks”, which means investing in the real estate market.
The pandemic has indeed caused real estate agencies to close for a solid trimester while thousands of sales were cancelled (some sources say around 20.000 sales) or postponed. The crisis has also led to an increase in the unemployment rate, and fewer people earning money mean fewer people being able to buy a property. It logically follows that the market will come to a stall and will need time to recover. However, even if prices will fall, this does not mean that sales will do as well. For example, people who have been confined in a small or old house during lockdown are now possibly considering the importance of having an extra room, a terrace or a small garden. De facto, around 2 million families are expected to be looking for a new house during the next couple of months.
From a practical point of view, the positive attitude of Italian future homeowners is justified. Interest rates are very low at the moment, and will be stable at least until the beginning of 2021. However, if we look at average real estate prices across the country we see that there are sharp differences between northern and southern Italy. In other words, the cheapest regions are in the south, while the most expensive ones are in northern and central Italy. Sicily, Calabria, Puglia, Umbria are generally cheaper, and Valle d’Aosta, Trentino-Alto Adige, Liguria, but also Tuscany, Lazio and Sardinia are placed on the opposite side of the chart.
According to the data, the cheapest city for you to buy a house in is Palermo (Sicily), followed by Genoa (Liguria) and Bari (Puglia). On the other hand, the most expensive cities are perhaps the most well-known abroad such as Venice, Milan, Rome, and Florence. Finally, Naples, Verona, and Turin are in the middle of the ranking as they are not too expensive but still not among the cheapest cities. Therefore, if you plan on moving to Italy to enjoy the warm weather and the delicious food, and you would like to live in a house near the seaside or in the middle of the country, central and southern Italy might be the right options for you. On the other hand, if you have a limited budget but prefer to live in a lively city in northern Italy, the best choice is moving to a small town or to the suburbs of a bigger city. Undoubtedly, big city centers offer excellent public transport, a variety of shops and a good standard of life but suburban areas have bigger and cheaper houses and quieter neighborhoods compared to city centers.
Having briefly outlined the general situation in the Italian real estate market, the next thing which is worth considering when buying a property is the time of the year. In general, months in autumn and winter offer the best prices (the best being November, according to charts). On the other hand, if you are not looking for cheap deals specifically, spring is the best time of the year to look for a property as there are generally more options to choose from. Finally, you should always monitor the interest rates in order to choose the best period of time for your investment.
As a general piece of advice, asking a real estate firm for a consultation is the best starting point. Indeed, real estate agents are constantly informed about the latest norms and regulations in the real estate market and they will provide you with all of the information you need. They can also help you find the best properties that meet your needs, arrange appointments and prepare all of the legal paperwork for your purchase. Since Italian bureaucracy can be very tricky, even more for foreigners, we advise you to seek help from a professional firm. Maintenance costs, documents, permits, insurance plans and taxes can be a jungle if you are not familiar with the Italian legal system. Therefore, if you need advice please feel free to contact us at info@italianrealestatelawyers.com. We will be happy to help you speed up the process of purchasing a property in a cost-effective and timely manner.
