How has Italy’s property market performed recently?

Despite a backdrop of political and economic uncertainty, which continues to create a challenging environment for Italy’s mainstream market, Knight Frank recorded a strong year for Italy’s prime and super prime markets – and 2019 looks set to be even better.

There’s been a record number of new enquiries, as well as a notable increase in registrations, viewings and sales. Florence, the Northern Lakes and Northern Tuscany are particular hotspots, with enquiries into the latter having doubled since April 2018.

Above: Amy Redfern-Woods

Prime property prices in Italy have reached a plateau and are now almost 40% less than in 2008. This strong value is further complemented by a number of initiatives rolled out by the government to encourage foreign investment, such as the flat tax regime introduced in March 2017.

Ruling that residents pay a flat fee of €100,000 per annum for five years irrespective of global income, this new tax offers an even more appealing incentive to high-net-worth individuals looking to relocate to Italy.

Who typically invests in Italy?

Traditionally we’ve seen a lot of British and American buyers and, despite the weaker pound, this has continued, with many buyers looking for a European retirement base. In addition, the strength of the Euro has prompted an increasing number of Northern Europeans - particularly those from the Netherlands and Germany - to invest in Italy. 

As the world becomes increasingly connected, our client base is becoming increasingly diverse. Over the past 18 months, we’ve also closed a number of considerable deals with Asian investors at the €10 million-plus bracket, and we’re seeing a growing number of buyers from Australia and New Zealand. 

What are the typical properties and price points in Italy’s property market?

There’s strong value to be found in Italy’s market. For €500,000, you could own a small pied-à-terre within one of the key Italian cities; a two-bed apartment within a shared development on Lake Como; or a small two- to three-bedroom farmhouse in either Tuscany or the Umbria region. 

Moving up to the €2-€3 million price bracket could buy you a villa in the Val d’Orcia or Lucca in Northern Tuscany; a sea view home on the Ligurian coast; or a spacious four-bedroom apartment in the likes of Florence, Rome or Milan.

At the higher-end of the market, €8 million could secure you an amazing villa in the renowned Forte dei Marmi area of Northern Tuscany; a beautifully finished and fully restored farmhouse; or even a small estate complete with vineyards in the Val d’Orcia or Chianti region. 

What are the key reasons for investing in Italy?

For Italians, family is at the heart of everything, and this has a deep resonance with many of our buyers looking for a home to make memories with their loved ones.

The Italian lifestyle is relaxed; think strolling through cobbled streets, eating some delicious local produce al fresco and exploring the country’s many cultural offerings. 

In addition to offering an enviable lifestyle, owning a home in Italy represents a solid long-term investment. We’re seeing a good proportion of buyers – even those at the very top end of the market – renting out their homes to cover costs and justify their investment.

With a significant number of homes in €1 million-plus bracket overseen by property management teams, owners can enjoy peace of mind that their home is looked after and ready for both them and their tenants throughout the year. 

What’s your advice to those looking to buy an Italian home?

With property prices at their lowest in ten years, now is a good time to invest in Italy’s property market. Consider your investment long-term, at least five years, and take the time to find the right property and area for you.

Whether you’re looking for a home in the the city or the countryside, on the lakes or the coastline, it’s well worth spending time exploring before committing to a particular area. 

With an Italian desk based at our London headquarters and nine local offices across Italy, we’re here to help at every stage of your property purchase. 

Amy Redfern-Woods is a Senior Negotiator at Knight Frank in the International Team, focusing on the Italian market.