Italian Real Estate market

Italian real estate market is attracting many investors

After many years of absence due to fear of crisis, Italian real estate is interested again by many international investors.  Now, Italian real estate in big cities or castles in the countryside are all very attractive investments.

Italy has always been a popular destination for those interested in art, culture, cuisine or history.  In the world, this is a country that is considered peaceful and romantic which makes many foreigners want to live and work here.  However, years ago, on the investment map, real estate in this country was not favored by international investors, even many people completely avoided this market especially after the European housing crisis in 2008. 

1- The Italian real estate market has changed

After a time of not receiving much attention from international investors due to fears of a crisis, from 2018 the Italian real estate market is gradually changing.  Italy is becoming a wise choice to restart real estate investments.

2- The reason why Italian real estate is attractive again

The reason why Italian real estate increases its attractiveness is that the investors’ confidence in the market's recovery from the crisis, the current price has bottomed down and will rise again in the near future.  The Italian market is often slow to react to fluctuations across Europe.  When the crisis broke out in 2008, it took 1-2 years for this market to begin to suffer. Recovery also takes longer. Italian real estate prices, especially in rural areas, have fallen by up to 30% compared to pre-crisis levels and are now starting to reverse upward.

Italian Real Estate market / ph: pexels 

Most customers buying luxury homes in Italy are German, British, French, Swiss, Belgian, Dutch, Norwegian, Danish and Swedish. It is said that the nationality of foreign customers tends to be more diverse in recent times especially with the increase of investors from Eastern Europe, Asia, the Middle East and South America.

Italy's new tax policy is also a driving force behind the interest of international investors as well as Italians living abroad.  Now, they can return to their homeland to invest with more favorable terms and incentives.
Additionally, political stability in Italy is also attractive to people in European countries. Elections in Italy take place fairly regularly, without many unpredictable uncertainties, so they have little impact on the operation of the real estate market. Besides investment purposes, many people from European countries also look for real estate in Italy as a place to make a permanent place to live after retirement.

Italy: Commercial real estate investment grows strongly

A new report from Savills analyzes favorable market conditions resulting from fund liquidations and how fund investors are taking advantage of market cycles to trade liquid assets in their asset portfolios.  

Specifically, cross-border investment into Italy accounted for more than half of total investment volume in the first six months of 2020, accounting for nearly 65% ​​of all transactions.  As noted by Savills, international funds are increasingly dominating the Italian real estate market with 80% of capital coming from European countries.

Savills analysis shows that Italy is in the early stages of the growth cycle compared to key European markets such as Germany, France and the UK.  Therefore, international investors are still identifying the potential for capital growth and profitability in this market.

Investment demand in the second half of 2020 continued to be driven by European investors, however, domestic investors also increased their real estate trading activities.

According to Savills, investment in the office market in Italy in 2016 accounted for 46% of the total market activity, an increase of more than 40% compared to the first half of 2019.  The retail sector accounted for 26% of the total investment volume.

The report also shows that the central areas of Rome, Milan, Florence are occupying a high position in the retail market and in the first 6 months of 2016, with a total investment value of about 505 million euros - 80% increase compared to 2019.

At the same time, Savills also recorded that in the first half of 2020, investment in commercial real estate has increased significantly.  22% of the total investment volume of 761 million euros is concentrated in the healthcare sector.

Chinese people massively invest in real estate market in Italy

The interest of Chinese investors in Italy increased by 223% and the number of real estate sales in Italy by Chinese investors increased by 43% in the first quarter of 2015.

They like to buy low-rise rooms and new apartment complexes.  They rarely pay attention to the seaside motels, but prefer to invest in expensive apartments or villas.  And they always pay in cash.

Those are the basic features that any Italian who wants to sell a house to Chinese investors needs to know, when the wave of investment from China is attracting more and more attention in Italy.

The prolonged economic crisis has caused the Italian real estate market to stagnate for many years.

Falling real estate prices in Italy have attracted more and more Chinese investors pouring money mainly into buying houses in Rome and Milan - the two largest cities in the country.

But recently, they have begun to pay attention to properties in Venice, a popular tourist city as well as luxury villas on Lake Como in northern Italy - A vacation spot that attracts the rich and the world's superstars.

According to statistics of China's real estate portal Juwai, the interest of Italian investors in Italy has increased by 223%.

The number of real estate sales in Italy made by Chinese investors increased by 43% in the first quarter of 2015.

The average value of each property that the Chinese bought in 2015 was 893,926 euros, slightly less than the price of the house they bought last year.

Among the places where the Chinese invest in real estate the most, Milan is at the top.

The effect of the World Expo 2015 is certainly one of the important reasons for buying property here.

For a long time, Milan has been the center of commerce and services of Italy and is also the place where the Chinese community in this country concentrates the largest business.

One of the important reasons for the increase of Chinese investment in real estate in Italy is the growing trade relationship between Italy and China.

With China, Italy is currently the 15th largest trading partner in the world and the fourth in the European Union (EU).

Two-way trade turnover between Italy and China in 2014 reached over 8 billion euros.

The Italian government also has a policy to encourage Chinese investors to invest in the Italian market.

However, real estate has only become "hot" for the Chinese in recent years.

Some of the Chinese investors buy for tourism business, others buy to stay, after calculating that, in the near future, they will move here.

The presence of Chinese investors in Italy has skyrocketed since 2011, after Italy launched attractive programs to attract investment capital from China.

Chinese people like to pour money into buying houses in the center of big cities and luxury villas in the surrounding areas.  They often look for properties with two to three bedrooms, close to schools so that after moving there, their children can go to school.

According to Il Sole 24 Ore's forecast, this investment trend will continue to last and may make the real estate market in Italy heat up.

Italian Real Estate market

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