If you're thinking of buying or selling a property in Italy, you might be wondering what's going on with the housing market. Why are prices so high? Will they keep rising or fall soon? What are the factors that influence the demand and supply of real estate? And what can you expect in 2023?
In this article, we'll try to answer these questions and more, using real-life examples We'll also give you some tips on actual italy house prices and how to find your dream home in Italy with the help of our agency, KALINCA Immobiliare.
- The current state of the Italian housing market
- The main causes of the price increase
- The predictions for 2023
- How to buy or sell a property in Italy with KALINCA Immobiliare
Let's get started!
The current state of the Italian housing market
The Italian housing market has been experiencing a strong recovery since 2020, after several years of stagnation and decline due to the economic crisis and the pandemic. According to Immobiliare.it, one of the leading online portals for real estate in Italy, the average asking price for property for sale in Italy was €1,967 per square meter in March 2023, with an increase of 1.71% compared to April 2022 (€1,934 per square meter). Over the past two years, the average price in Italy has reached its peak in March 2023, with a value of €1,967 per square meter².
The price increase was not uniform across the country, however. Some regions saw higher growth rates than others, depending on factors such as location, type of property, demand, and supply. For example, Trentino Alto Adige had the highest average asking price for property for sale in Italy in March 2023, with €3,138 per square meter, followed by Valle d'Aosta (€2,663 per square meter) and Liguria (€2,539 per square meter). On the other hand, Calabria had the lowest average asking price for property for sale in Italy in March 2023, with €923 per square meter, followed by Molise (€980 per square meter) and Sicily (€1,125 per square meter)².
The same trend was observed for rental properties. The average asking price for rental properties in Italy was €12.03 per month per square meter in March 2023, with an increase of 4.61% compared to April 2022 (€11.50 monthly per square meter). Over the past two years, the average price in Italy has reached its peak in August 2022, with a value of €12.15 per month per square meter². Again, some regions had higher or lower prices than others. Lombardy had the highest average asking price for rental properties in Italy in March 2023, with €15.50 per month per square meter, followed by Valle d'Aosta (€14.87 per month per square meter) and Lazio (€13.43 per month per square meter). The lowest average asking prices instead were in Umbria (€6.97 per month per square meter), Sicily (€7.44 per month per square meter), and Abruzzo (€7.83 per month per square meter)².
These figures show that the Italian housing market is booming, especially in some areas that are more attractive for buyers and renters. But what are the reasons behind this phenomenon? And will it last?
The main causes of the price increase
There are several factors that have contributed to the rise of house prices in Italy in recent years. Some of them are:
Low interest rates: The European Central Bank (ECB) has kept interest rates at historically low levels since 2016, making borrowing cheaper and easier for both individuals and businesses. This has stimulated demand for real estate in Italy, as they can take advantage of low mortgage interest rates and favourable lending conditions. According to My Dolce Casa, a website that provides information on the Italian real estate market, the average mortgage interest rate in Italy was 1.5% in 2022, compared to 3% in the US¹.
Limited supply: Another factor that drives up house prices in Italy is the limited supply of available properties, especially in the most popular areas such as big cities, coastal towns, and tourist destinations. Italy has a high rate of homeownership (over 70%), which means that many properties are inherited and passed down within families, reducing the number of properties on the market¹. Moreover, Italy has strict regulations on building new constructions, especially in historical areas, which limits the possibility of increasing the housing stock.
High demand: On the other hand, there is a high demand for properties in Italy, both from domestic and foreign buyers. Italy is one of the most visited countries in the world, attracting millions of tourists every year who fall in love with its culture, cuisine, and landscapes. Some of them decide to buy a second home or a holiday home in Italy, or even relocate permanently. According to Idealista, a real estate portal, foreign buyers accounted for 8% of all residential transactions in Italy in 2020³. The main countries of origin were Germany, France, Switzerland, the UK, and the US³. Foreign buyers tend to prefer properties in scenic locations such as Tuscany, Umbria, Lake Como, and the Amalfi Coast³.
Pandemic effect: The coronavirus pandemic has also had an impact on the Italian housing market, although not as negative as one might expect. In fact, according to Scenari Immobiliari, a research institute specialized in real estate analysis, the pandemic has accelerated some trends that were already present before 2020, such as the preference for larger and more comfortable properties, with outdoor spaces and proximity to nature. The pandemic has also increased the demand for properties in smaller towns and rural areas, as more people have embraced remote working and sought a better quality of life away from crowded cities. Furthermore, the pandemic has stimulated some initiatives to revitalize depopulated villages and towns by offering properties for sale at symbolic prices (such as €1), attracting buyers who are willing to renovate them.
These are some of the main causes of the price increase in the Italian housing market. But what can we expect for 2023? Will prices continue to rise or will they start to decline?
The predictions for 2023
Predicting the future of any market is not an easy task, especially when there are so many variables and uncertainties involved. However, based on some data and trends observed so far, we can try to make some reasonable assumptions about what will happen in 2023.
According to Scenari Immobiliari, the Italian housing market will continue to grow in 2023, although at a slower pace than in 2022. The turnover of residential transactions is expected to increase by 6.5% compared to 2022, reaching €148 billion. This would make Italy the second-largest real estate market in Europe after Germany. The average price per square meter is also expected to increase by 2% compared to 2022.
However, this growth will not be homogeneous across the country or across different types of properties. Some regions will perform better than others, depending on their attractiveness for buyers and renters. For example, Liguria, Tuscany, Umbria, and Sardinia are expected to see higher price growth than the national average, while Calabria, Molise, and Sicily are expected to see lower price growth or even price declines⁴. Similarly, some types of properties will be more in demand than others, depending on their features and location. For example, properties with outdoor spaces, such as gardens, terraces, or balconies, will be more sought-after than those without them, as well as properties in rural areas or small towns that offer more tranquility and nature⁴.
Of course, these predictions are based on current trends and assumptions, and they may change depending on how the economic and social situation evolves in Italy and globally. For example, factors such as the evolution of the pandemic, the availability of vaccines, the recovery of tourism, the political stability, the fiscal policies, and the environmental issues may affect the housing market in positive or negative ways.
Therefore, it is important to keep an eye on the latest news and data about the Italian housing market, and to consult with experts who can advise you on the best opportunities and strategies for buying or selling a property in Italy.
How to buy or sell a property in Italy with KALINCA Immobiliare
If you are interested in buying or selling a property in Italy, you may feel overwhelmed by the complexity and bureaucracy of the process. You may also have doubts about how to find the right property for your needs and budget, how to negotiate the best price and conditions, how to deal with legal and tax issues, how to arrange financing and insurance, how to manage utilities and maintenance, and so on.
That's why you need a reliable and professional partner who can guide you through every step of your real estate journey in Italy. And that's where we come in.
We are KALINCA Immobiliare, a real estate agency specialized in helping foreign buyers and sellers achieve their property goals in Italy. We have over 20 years of experience in the Italian real estate market, and we know how to find the best deals and opportunities for our clients.
We offer a wide range of services, including:
- Property search: We help you find your dream home in Italy among thousands of properties available on our website KALINCA Immobiliare. You can browse by region, type, price, size, features, and more. You can also contact us with your specific requirements and preferences, and we will send you a personalized selection of properties that match your criteria.
- Property valuation: We help you determine the fair market value of your property in Italy based on its location, condition, features, demand, supply, and other factors. We provide you with a detailed report that includes comparable sales data, market trends analysis, and professional advice on how to maximize your property's value.
Property marketing: We help you sell your property in Italy by creating an effective marketing strategy that includes online advertising (on our website https://www.kalinkaimmobiliare.com/ as well as on other major portals), offline advertising (such as flyers, brochures, signs, newspapers, magazines, etc.), social media marketing (such as Facebook, Instagram, Twitter, etc.), and word-of-mouth marketing (such as referrals, testimonials, reviews, etc.). We also use professional photography and videography to showcase your property in the best possible way.
Property negotiation: We help you negotiate the best price and conditions for your property in Italy by using our market knowledge, negotiation skills, and legal expertise. We also assist you with drafting and reviewing all the necessary contracts and documents, such as the reservation agreement, the preliminary contract, the final deed of sale, etc.
- Property legal assistance: We help you deal with all the legal aspects of buying or selling a property in Italy by providing you with qualified lawyers who can advise you on matters such as taxes, fees, permits, registrations, mortgages, inheritance, etc. We also liaise with the notary public who will oversee the final completion of the sale.
- Property after-sale service: We help you with all the post-sale issues that may arise after buying or selling a property in Italy by providing you with ongoing support and assistance. For example, we can help you with transferring or setting up utilities (such as water, gas, electricity, internet, etc.), arranging insurance (such as home insurance, liability insurance, etc.), managing maintenance and repairs (such as gardening, cleaning, painting, plumbing, etc.), renting out your property (such as finding tenants, collecting rent, handling contracts, etc.), or selling your property again (such as valuing your property, marketing your property, negotiating your property, etc.).
As you can see, we offer a comprehensive and personalized service that covers every aspect of buying or selling a property in Italy. We are not just a real estate agency; we are your trusted partner who will make your property dreams come true.
If you want to know more about how we can help you buy or sell a property in Italy with KALINCA Immobiliare, please visit our website https://www.kalinkaimmobiliare.com/ or contact us today. We will be happy to answer any questions you may have and provide you with a free consultation and valuation of your property.
We look forward to hearing from you soon!
Your Italian Property Partner
+39 123 456 789