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‘Reversed trend’: Property in southern Italy is now in demand due to the pandemic

A sharp rise in demand for homes in southern Italy has upended previous property market trends, the latest statistics show.

‘Reversed trend’: Property in southern Italy is now in demand due to the pandemic
Homes in Sicily. Photo: Giuseppe Cacace/AFP
Italy’s domestic property market has long had two major splits – city and country, and north and south. 
 
Unsurprisingly, prices in and around northern cities such as Milan tend to be among the highest in the country, while homes in the south are usually more affordable (though not always). The rural property market, meanwhile, has in fact been in slow decline for years.
 
But now with the rise of remote working, many people can now consider moving to a more spacious property in a cheaper area. Others are looking at returning to southern hometowns after previously moving north to find work.
 
While Italian estate agents reported a rise in demand for rural properties during lockdown, with people hoping to escape the city due to the pandemic, a new study by property search portal Idealista now shows that demand for property in the south is now booming.
 
The Barletta-Andria-Trani area in Puglia saw the sharpest rise in demand, with 60 percent more searches for property in this area than at the beginning of the year, Idealista found.
 
It was followed by Rieti with 56% and Agrigento at 55%.
 
“This is a very definite reversed trend,” said Francesco De Bellis, an independent estate agent based in the city of Bari, Puglia – which saw a 20 percent increase in demand according to Idealista.
 
“In the past months we have had more enquiries from people wanting to move to this area,” he told The Local. “Most are originally from here and became tired of living in a northern city. They miss the sea, the food, the family. This is their chance.”
 
 
“We have also had more enquiries from people from other parts of Italy and Europe who want to move here for various reasons,” he said.
 
“There is the perception that property is much cheaper in the south,” he says, “you must also consider the different types of housing stock, the condition of properties.”
 
 
Meanwhile, demand for property has dropped by ten percent in Milan, where prices have traditionally been among the country's highest.
 
In most other cities however, demand quickly resumed after lockdown.
 
Verona saw the biggest increase in demand at 59%, Genoa 32% and Rome 25%.
 
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The question prospective buyers and sellers have been asking throughout the pandemic is whether house prices will fall.

So far, property experts have said repeatedly that it is too early to see a marked change in prices in most areas.
 
 
De Bellis says that he has seen a slowdown “for sales of some types of property”.
 
“People will always need to move house,” he says. “But what I see more than prices falling is that some properties are just not coming on the market.”
 
“Because of uncertainty, people are waiting to sell if they can.”
 
And will the new rise in demand for property in the south mean prices rise, too?
 
Due to the slow-moving nature of Italy’s property market, he says, “we just can’t know yet” if the increase in demand could have an effect on property prices in the south.
 
“That really would be a change,” De Bellis says. “However, we’re talking here about enquiries, not offers, not sales. Of course, many people who search online are just dreaming. They can't always afford those properties.”
 
While the reported fluctuations apply to the domestic market, demand on the international market – which focuses on holiday and retirement homes and luxury properties – may be different and has reportedly remained more stable throughout the pandemic so far.

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PROPERTY

Five pitfalls to watch out for when buying an old house in Italy

Tempted to snap up a little slice of Italy at a bargain price? The older the house, the more potential issues you'll need to be aware of.

Five pitfalls to watch out for when buying an old house in Italy

Italians themselves may have very little interest in buying or fixing up Italy’s many unwanted old houses, but international visitors are often swept away by the charm of these rustic buildings in romantic settings.

It’s easy to see why. The quirky structures, period details, and picturesque surroundings – not to mention low asking prices – inspire countless people worldwide every year to investigate buying an Italian home of their own, often as an investment or retirement property.

MAP: Where in Italy can you buy homes for one euro?

International interest in cheap Italian property has only intensified in recent years, with dozens of idyllic villages advertising ‘one euro’ homes and other low-cost property offers aimed specifically at foreigners.

Savvy buyers are aware that non è tutto oro quel che luccica (all that glitters is not gold), and quickly realise that these long-neglected buildings really cost somewhat more than one euro to buy and renovate. Still, some of The Local’s readers tell us these offers are worth taking advantage of.

But whether you’re looking at spending a couple of thousand euros or much more on your dream Italian property, there’s always a lot to consider – including some issues that you’re unlikely to experience when buying a home in your home country.

These unexpected issues can turn the Italian dream into a bit of a nightmare, and sometimes lead to buyers having to abandon a purchase, losing money in the process.

But if you’re aware of potential pitfalls in advance, you’re far more likely to be able to complete the purchase process with no major problems at all.

Property taxes and fees

Of course you’ll be expecting tax as part of the property purchase process, but Italian property taxes are particularly steep.

Experts say the total cost of buying in Italy will add approximately ten percent to the purchase price, and advise prospective buyers to budget accordingly.

There’s stamp duty, which is between two and nine percent of the cadastral value (valore catastale) of the property, with a minimum threshold of €1,000 even on the cheapest homes. Plus VAT at four or ten percent, land registry tax, and, if applicable, mortgage tax.

You can also expect to pay between one and five percent of the purchase price as a fee to the estate agent. In Italy agents work for both the buyer and seller – and collect compensation from both parties once the deal is done.

Then you’ll likely need a couple of thousand euros for the notary, plus a similar fee for any other agents you use, such as a mortgage broker, plus legal fees if a lawyer is involved.

See more about the ‘hidden’ costs of buying property as a foreigner in Italy.

Bickering relatives

It may sound unbelievable to non-Italians, but it’s not unusual to find that even the smallest old properties, or parts of them, are legally divided up between dozens of family members due to Italy’s inheritance rules.

One buyer The Local spoke to found herself having to deal with 22 people, all relatives, who each turned out to own a share of a small property she was buying in Mussomeli, Sicily; one of the first places in the country to sell off old properties for a euro.

Toti Nigrelli, the mayor of Mussomeli, said “having to negotiate the sale with multiple owners” was normal.

While this buyer impressively managed to negotiate the deal with all 22 parties, in many cases similar sales fall through because relatives – distant cousins, great-aunts, long-lost nephews – are often not on good terms, disagree over the sale, or can’t be traced.

At the very least, you will need to check the property’s records carefully to make sure there are no surprises in store – such as long-lost relatives who might turn up to claim the property back after you’ve bought it.

A trullo house before renovation in Cisternino, Puglia. AFP PHOTO / GIUSEPPE CACACE

Illegal builds

Another thing that often astounds foreigners who buy property in Italy is the enormous number of illegal builds – homes that were built entirely without permits – on the market as well as the even greater number of houses featuring modifications which were never officially approved or recorded.

Illegal housebuilding in Italy is often thought of as a decades-old issue, but recent data shows that, in 2021, 15 houses were built illegally for ever 100 authorised. Illegal building is twice as common in the south of the country as in the north, and thousands of cases are detected every year – though few people are ever prosecuted.

If you buy a house with undeclared modifications, the buyer is usually held responsible for paying to regularise the paperwork with the town hall. If you catch this issue early enough – and not all sellers or estate agents will inform you about them – you may be able to negotiate for the seller to cover these costs before you make an agreement.

If however you end up unknowingly buying a house built without the correct permissions, or if you never regularise any unauthorised changes, the property will likely prove very difficult to sell on.

This is one of many reasons why buyers need to carefully check the catasto (land registry or cadastral records) of a property themselves, and have a notary check everything is in order.

Conservation rules

When you initially view and fall in love with that charming stone house in the historic centre of a gorgeous Italian hilltop town, rules and regulations are probably not the first thing on your mind.

But it pays to know that old homes featuring frescoes, loggias or ancient stone cellars, as appealing as they are, are often protected by Italy’s cultural heritage authority – meaning more red tape for their owners.

One reader was forced to give up her dream of buying a portion of a two-floor 1700s building in the village of Civita Castellana, Lazio, because it needed renovation work to make it livable – but the frescoed walls, decorated fireplaces and elegant stonework entrance were vincolati (under restrictions) due to Italy’s historic conservation rules.

READ ALSO: Tuscany or Basilicata? How Italy’s international property market is changing

In many cases, this means renovation work can’t be carried out at all, or will be subject to reams of paperwork and close monitoring from authorities known as the sovraintendenza belle arti. To make things trickier, rules can also vary by local authority.

If you think a property you’re interested in might be subject to these rules, it’s always wise to consult the local sovraintendenza at an early stage. And of course, you’ll want to get hold of the records of the property from the catasto (land registry).

Resale prices

The high taxes and costs involved in buying and selling a property in Italy are often said to be one reason why, for most Italians, the concept of climbing the property ladder doesn’t really exist in the way it does in some countries.

Italy’s property market is unusual in Europe in that house prices on average are relatively stagnant. With the exception of some types of property – such as new-build apartments and luxury homes – overall prices have risen little over the past decade.

This is partly because the Italian market is weighed down by a large volume of old, neglected properties in need of major work – hence schemes like the one-euro sales and the (formerly popular but now-unavailable) 110 percent ‘superbonus’ for renovations.

But overall, if your main motivation for buying an old Italian home and renovating it is profit, you’ll need to consider that the resale potential may not be what you’d hope. The exceptions to this are at the pricier end of the market, in most major city centres, and in tourist hotspots.

See more in The Local’s Italian property section.

Do you have any more tips on buying a property in Italy? We’d love to hear from you in the comments section below.

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