Housing prices in Italy have been falling steadily since the 2008 global housing crisis. Coupled with three years of increasing sales, banks eager to grant loans and an affordable mortgage tax rate buying property in the Italian peninsula is now more affordable and accessible than ever.
Average property prices in the countries biggest cities have been falling an average of 2.1% for news homes and 2.5% for existing homes. This illustrates a trend that has been ongoing for the better part of the decade. In Q3 of 2015 Italy’s housing price index fell by 2.26% and 2.44% when adjusted for inflation.
In 2015, residential property sales grew by 6.5%, with around 445,000 residential properties sold, it’s second year of consecutive growth, according to Agenzia delle Enrate. According to the agency the rise in sales was attributable in part to the significant improvement of mortgage rates, which rose by 19.5% in 2015.
Since 2016 the market has been stabilizing. However, growth in terms of pricing and turnover is still lower than the European average making Italy one of the most affordable places to invest in the continent.
More good news for those looking to invest is that last year the Italian government launched new tax measures to help boost the country’s property tax and have recently removed bureaucratic barriers, making the process of purchasing easier for foreign investors.
There are no capital gain taxes after five years of ownership and no inheritance taxes. Property taxes for residents are currently about 400 euros a year and 1,000 euros for second homeowners. However, if you are looking to let, there is also a new 25% tax discount on houses being lent on contracts with a minimum period of three years plus two years of automatic renewal.
As of December 2015, the average interest rates for new housing loans were at a historic low of 2.49%. Just remember that you will need to set some money aside for legal costs and agent commission and other fees, which should cost you about 10 percent of the purchase price.
Where to invest?
Due to a strong dollar against euro and a lack of restriction on foreign buyers, American investors have begun flocking to the Italian market. There has also been an increase of buyers from Germany, Switzerland and Scandinavia who all seem to be attracted to coastal and other waterfront areas.
Lake Como, set at the foothills of the Alps in Northern Italy has long been a holiday favorite and is perfect for those seeking scenic lake views and mountain retreats. Puglia, the “Florence of the South” set on the heel Italy’s “boot” is also a time-tested favorite for those seeking to indulge in the best of the Mediterranean.
Perhaps Italy’s most famous areas of Tuscany and Venice have seen recent declines in house prices of about 2.0%, making them more affordable than average. However, prices in capitals like Milan and Naples have been virtually stable with small increases of 0.7% and 0.1%, respectively.
Those seeking bargains should check out newly “discovered” areas like Dolomites in the Southern Alps or the coastal region of Marche off the Adriatic Sea. Both are equally stunning visually and property is a fraction of the cost of popular areas like Tuscany and Vento.
Wherever you may seek your get-away, the sooner you act, the better. Prices aren’t likely to stay this low for long.
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Originally published at www.liveonriviera.com.