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ECONOMY

The parts of Italy where house prices keep rising despite the pandemic

Despite the Covid-19 health emergency damaging many sectors of Italy's economy, the nation's housing market has proven resilient - at least in some areas.

Published: 10 November 2021 16:40 CET
Here are the neighbourhoods where Italy's house prices are rising fastest since before the pandemic.
Here are the Italian neighbourhoods where house prices are rising fastest since before the pandemic.

Photo by Tierra Mallorca on Unsplash

Italy suffered one of Europe’s worst economic slumps in 2020, and the nation’s property market – which was already sluggish pre-pandemic – has fluctuated.

Recent studies have shown that house prices are now declining again overall after a brief uptick last year.

But this isn’t the case across the board. Some areas are seeing a huge jump in demand that means prices just keep rising, according to the findings of a new survey by real estate website Idealista.

Considerable price hikes were noted in neighbourhoods on the outskirts of some of Italy’s large cities, as well as around smaller cities which tend to rank highly on ‘quality of life’ indexes.

MAP: Which are the safest parts of Italy to live in?

Idealista described the localised value increases as “the effect of a phenomenon of regionalisation of growth accentuated during the pandemic”.

The survey revealed the top ten areas that have experienced the greatest rebound and noted the factors they have in common.

“They are peripheral, well-connected and able to meet liveability criteria such as environmental quality and the quality of public space, while managing to satisfy people’s expectations of wellbeing,” stated the report.

This evolution in prices shows how the Italian real estate market is “undergoing a profound transformation”, defined as “a fragmentation into many micro-areas”.

The table below shows the top ten fastest growing Italian neighbourhoods, according to the study.

Source: Idealista/Datawrapper.

The province with the districts that has increased their value the most is Milan.

The Turro area of the Milanese city recorded a 44.9 percent rebound compared to the first quarter of 2020 – that is, the one immediately preceding the pandemic.

That places it ahead of Olmi-Muggiano (42.1 percent) and Val di Sole-Fatima (24.9 percent).

This substantial increase in Turro is attributed to the redevelopment of various areas of the district, as well as improvements connected to the university.

A creation of cycle paths that link different parts of the district are also said to have had a strong impact in this area.

In other sections of Milan, such as Olmi Muggiano, the rise in prices is due to the growing importance of the suburbs during the pandemic.

An increasing amount of people turning to remote working, or ‘smart working‘ as it’s known in Italy, has allowed many people to move to less central areas offering larger, more family-friendly homes at much cheaper prices.

READ ALSO: Why now is the ‘best’ time to buy property in Italy

Padua ranks in the top ten list, with two neighbourhoods. Idealista explains that these are two strategic areas for travelling, both by public transport and by private vehicle.

Another province that has seen an increase in some of its districts is Modena, where growth is recorded at almost +25%.

Smart working has changed where people are buying houses in Italy.
Smart working has changed where people are buying houses in Italy. Photo: Persnickety Prints on Unsplash

These areas are thriving due to their proximity to the university, one of the oldest and most renowned in Europe.

“They feature large, newly built apartments in an area that offers greenery and tranquillity, in a strategic position thanks to its proximity to the historic centre,” the report says.

Bergamo, the Lombardy town at the centre of the first wave of Covid-19, also experienced a rise in house prices.

One district called Giovanni XXIII-Stazione saw sale prices rise by 23.6 percent. This growth, which occurred during the lockdowns, “is attributable to the frequent use of smart working by companies”, noted the study.

READ ALSO:

It’s claimed that many people went back to Bergamo to work there, but used the good public transport connections to reach other cities in Lombardy when needed.

In central Italy, Arezzo is the province where prices have shot up most this year.

Explaining its popularity, the findings said the wealthy Tuscan town offers employment opportunities but at the same time very quiet, in the heart of the Tuscan countryside”.

Palermo takes the title for southern Italy. As various companies have allowed their employees to work remotely, Montepellegrino on the island of Sicily has been the district of choice.

“This area is well connected by a cycle path and offers the possibility of doing outdoor sports, enjoying a temperate climate,” says the report.

Despite Italy recording its biggest contraction in GDP since the end of World War II during the pandemic, house prices in Italy increased overall last year (by +7% in the first quarter of 2020 compared to the end of 2019).

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.

Published: 29 March 2024 10:17 CET
Updated: 29 March 2024 12:03 CET
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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