Foreign buyers returning to the Italian property market with sales up in some sectors
Buyers are returning to the Italian property market which is picking up after a muted 2017 with the top end recovering the fastest, according to new research.
Sales of properties valued at €10 million plus have increased significantly and this is expected to filter down to lower priced homes in the coming year, says the latest analysis from international real estate firm Knight Frank.
Overall enquiry numbers for Italian homes were up 133% in 2017 year on year and buyers from Northern Europe are active, particularly those from within the Eurozone who have been able to take advantage of moderating prices without being penalised by any currency shift.
In the three months to March 2018, online property viewings by prospective buyers in the United States accounted for 11% of all searches on Knight Frank’s website. But the biggest group of buyers still come from the UK at 44.8%.
The next biggest group of buyers in the prime property market are from within Italy at 15.1%, then the US, then 2.6% from Australia, 2.6% from Germany, 2.4% from Canada, 2.3% from Switzerland, 2.2% from Denmark, 1.9% from the Netherlands and 1.8% from France.
Looking ahead to the rest of 2018, the report suggests that buyers are arguably facing the best quality stock for some years. ‘Where prices have plateaued we expect the market to gain traction as inventories diminish,’ said Amy Redfern, senior negotiator for Knight Frank’s Italian desk.
She explained that in Italy home owners have displayed a reluctance to acknowledge the reality of softening prices over the last decade, which has boosted stock levels and drawn out the market’s recovery. Despite this, Knight Frank’s Italian prime residential index confirms that the rate of luxury price declines is now bottoming out with Liguria, Chianti and Milan registering positive price growth in 2017.
‘Our enquiry numbers for Italian homes, up 133% in 2017 year on year, suggests any uncertainty on the political or economic stage such as the general election, banking crisis and Brexit negotiations, have not influenced buyers’ decision making,’ Redfern pointed out.
‘The only notable impact has been at the very top end of the market where wealthy buyers, although still active, have reduced their budgets to mitigate risk and currency exposure,’ she added.
The report says that the lifestyle on offer in Italy remains the primary motivation for most international buyers. ‘A second home located within a short flight of their primary residence, which offers strong rental prospects and the promise of a good climate, culture, and landscape acts as a strong pull,’ said Redfern.
‘Northern Europeans are active, particularly those from within the Eurozone who have been able to take advantage of moderating prices without being penalised by any currency shift.
The love affair with all things Italian continues for many Americans,’ she commented.
‘Of note is the uptick in interest from Australia and New Zealand. Many applicants are semi-retired couples with children working in Europe seeking a long term summer base to use for family get togethers. City apartments in Florence and Rome are popular; particularly those easy to maintain as well as lock up and leave,’ she added.
Indeed, Florence, Rome and Lucca are emerging as potential hotspots and they currently account for around 40% of enquiries. Tuscany, the embodiment of Italian charm, remains high on many wish lists, along with the Northern Lakes while waterfront homes in Portofino and Costa Smeralda in Sardinia, have seen an increase in demand.
The type of property is dependent on the city or region, according to the report. In Italy’s cities, international buyers are seeking two or three bedroom apartments in central locations and want them to be finished to a very high specification, in a prime location and a ‘hassle-free’ purchase requiring no additional work.
In Venice and the Northern Lakes, those buyers with deep enough pockets want direct canal or lake frontage to maximise their investment, both from a lifestyle and a rental perspective.
Finally, in rural parts, a stone built farmhouse with a few hectares, an attractive pool and rural views of vineyards and olive groves appeals to family buyers seeking the full Tuscan experience.