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PROPERTY

The Italian properties ‘nobody’ wants to buy in 2021

The lockdown and travel restrictions caused by the pandemic are changing what potential buyers are looking for in future homes in Italy, as well as what they’re trying to avoid.

The Italian properties ‘nobody’ wants to buy in 2021
Photo: Filippo Monteforte/AFP

It’s a generalisation, but it’s fair to say that before the pandemic many Italians didn’t give too much importance to the place they put their head down to sleep at night.

Italy is statistically a nation of apartment-dwellers (more than two-thirds of the population live in apartment blocks), preferring to spend most of their time outdoors and meeting friends and family in cafés and bars rather than hanging out at home.

This doesn’t mean people in Italy don’t care about the state of their homes – far from it, in fact. But one cultural difference those from northern Europe often find with Italian partners or flatmates is that there’s not much interest in making the space especially comfortable or cosy. After all it’s mainly just somewhere to sleep, shower, and make a quick coffee before dashing to work.

Or at least, that was the case until about a year ago.

The pandemic seems to be changing several property trends in Italy, including the penchant for apartment living that’s been around since the 60s.

Photo by Tiziana FABI/AFP

We’re not predicting that Italians are all looking for a life in the suburbs now that remote working is catching on. But some property types have become far more popular – others less so.

The following are all factors to bear in mind if you’re thinking of selling or buying a property in Italy in 2021.

Too small

More space was one of the things Italians under lockdown yearned for most in 2020, and this is clearly reflected in current market trends.

The average size of an Italian home is 81 square metres – smaller than the Spanish (97 m2), German (109 m2) and French (112 m2) averages.

READ ALSO: ‘Smart working’? Here’s what you need to know about going self-employed in Italy

According to a study by real estate website Immobiliare.it, searches have increased for properties that are 100 sqm or larger over the past year.

This change in priorities is thought to have contributed to property price drops of more than 10 percent in central parts of big cities such as Milan, Rome and Bologna, where small apartments have long been the only affordable option for most.

Photo: Andreas Solaro/AFP

No outdoor space

There’s no doubt Italians will continue living in blocks of flats once the pandemic is behind us, but having some form of outdoor space such as a balcony, a terrace or a garden is more important than ever. 

According to property search engine Idealista, the filter for homes with balcony or terrace is now being used up to 40 percent more than this time last year.

And it seems that some people have re-evaluated their priorities completely and are searching for even more space.

In Italy, rural homes have long been perceived as the preserve of retirees and foreign second-home owners – but this is another trend that appears to be changing.

One survey last year highlighted a rising trend among young people (20 percent more than during the same period in 2019) hoping to move away from urban areas.

READ ALSO: 

Italy has a large stock of older, often rural properties which have long proved difficult to sell in a market where apartments and new-build homes have long been more in demand.

But the government’s renovation superbonus, introduced as part of a package of financial aid for the country, is now making the prospect of renovating an old house in the countryside a more realistic prospect – especially for younger generations who previously would’ve been unable to afford such a project.

READ ALSO: Italy’s building bonus: Can you really claim back the cost of renovating your Italian property? 

“This is quite interesting as it speeds up the requests for properties in need of huge renovations,” noted Sara Zanotta of Lakeside Real Estate, based on Lake Como.

“Enquiries for this kind of property will increase in 2021 by up to +45%,” she told The Local in January.

“From July 2020 to December 2020 these requests increased by +32% on the same period in 2019.”

Photo: Miguel Medina/AFP

Outdated or no facilities

Older houses and apartments with an outdated layout, lack of natural light or poor funtionality are big no-nos nowadays in Italy thanks to the pandemic, as well as being key factors in why new, more practical builds are likely to see prices remain stable.

However while old-fashioned apartments with long corridors and lots of tiny rooms are not desirable, more modern open-plan layouts (or “open space”, as they’re often called in Italy) are also becoming less popular as people now spend more time at home, estate agents say.

Since most apartments available in Italy now fit one of those descriptions, buyers are reportedly making more changes to new homes than before – knocking through walls or otherwise altering unsuitable layouts.

Properties without a lift in the building or without parking spaces are also less in demand. 

Among estate agents’ predictions for Italy’s property market in 2021 are an increased interest in “multifunctional homes, with larger dimensions and modular spaces adapted for remote working.”

And those who do continue living in apartments will increasingly be looking for blocks with more facilities, “such as a garage, gym, storage or multipurpose spaces.”

Location, location

Houses in premium locations, such as by the coast or lakes, have also always commanded higher prices and this is unlikely to change.

However, property prices in areas outside regional capitals rose, in many cases for the first time in years, as property experts say people are increasingly looking for larger homes in quieter areas.

“Non-capital municipalities grew most of all, by +8.1%, compared to an overall decline for the capital city municipalities (-6.7%),” a joint report by Italian estate agencies Gabetti, Professionecasa and Grimaldi stated.

As in many other countries, Italian cities are experiencing the trend of losing some of their population as people move to the provincial outskirts of the big urban areas in search of space, greenery and more freedom. 

READ ALSO: 

While real estate agencies focused on the international market say there’s continued interest from would-be buyers abroad despite the pandemic, Italians too are increasingly looking at buying a second (or first) home in the country.

But as well as the traditionally expensive areas, demand is rising in previously less sought-after parts of the country.

Many are considering relocating to rural areas due to the rise of remote work or ‘smart working’, with southern Italy now a sought-after destination among people looking to swap city life in the north for a lower cost of living.

While there are suggestions that more people may move back to Italy’s many depopulated hilltop towns as a result of the pandemic, these hopes may be hampered by the fact that such areas usually lack infrastructure and internet connectivity.

If a property offers neither the transport connections of a city nor the extra space afforded by the countryside or suburbs, it’s unlikely to be snapped up under the current circumstances.

See more in The Local’s Italian property section.

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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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