The Italian Property Market In April 2020
The Italian property market isn’t at its strongest point. The coronavirus pandemic that has swept the country in March and April 2020, has had a very profound impact on the property market within the country.
Before the pandemic, the housing market in Italy was very strong. Prices were 3% higher at the beginning of March 2020 as they were exactly twelve months before. However, at the beginning of April, the trend had dramatically reversed with Italian house prices reducing by 10%.
The whole market has dropped significantly with the recent events. How the Italian property market will react afterwards is very unknown. It is likely that there will be a long period before the market can recover. During that period, it is likely that prices may stagnate.
Can The Italian Property Market Recover?
The Italian property market has struggled in recent years and its recovery was largely attributed to foreign investment. The example of how the foreign market has helped can be seen with properties in Tuscany.
House prices in Tuscany had fallen by 40% in the ten years between 2007 and 2017. Then in 2018, more properties were bought by those who lived outside of Italy. This changed the trend for the downward prices and drove prices up to 1%. Then in 2019, the house prices again increased by 3%.
So, if the Italian property market is going to recover, then it is important that there is foreign investment in properties.
Why Is Foreign Investment So Important For The Italian Property Market?
Foreign investment is so important because the type of buyer is completely different to the local buyer. For instance, the Italian home buyer is impacted by the local politics, economy and news. With the latest news coming from Italy and the significant economic impact, it is likely that fewer Italians will be buying homes.
In contrast, those who are buying homes abroad, particularly foreigners buying homes in Italy, are more interested in the local culture and facilities. As those who are often interested in buying a second home are often wealthy, it is more likely that there would be a slightly less drop in demand than some would expect.
While Italian property prices and demand are likely to drop slightly, the future is still bright for the Italian property market. And with all the cultural hotspots Italy has to offer, investors will always be attracted to this beautiful country.