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Top of the Props: the Italian way
Wednesday, February 24, 2010
The top three positions remained the same in January's Top of the Props chart - which provides a monthly pop chart snapshot of the most popular countries on the site - Spain, the USA and Portugal clung onto their medal winning positions - Italy nabbed fourth place in the chart, so let's check out what the property industry thinks the country has to offer investors and holidaymakers alike in 2010...
Italy
Buy Association reports there is more interest in the less risky world property markets in 2010. There is talk that in Italy, a well established country, property prices could increase by 3-5% in late Spring", says Linda Travella of Casa Travella, who has been selling property in Italy since 1987.
"2009 started off very slowly in all markets with the realisation of what had happened in September 2008.
"That said, Italy suffered less than most other world markets and prices did not really start to drop in the first quarter unless clients were desperate to sell, where reductions of between 5 -10% maximum were reflected in both re-sale and new build properties.
"Spring turned into summer with the realisation that there were for sure, less buyers, and unless vendors were more flexible, clients would go elsewhere. This manifested itself in price reductions and vendors more likely to consider offers.
"The last quarter of 2009 saw sales and interest returning, especially with Italy being considered a safer investment than many other markets around the world," she added.
Stephen Hughes, associate director at Foreign Currency Direct says, "There are plenty of positives for those looking to buy in Euros going into 2010 after a relatively stable second half of 2009.
Even though the UK appears to have fallen behind other economies in the race out of recession and economic recovery, Sterling has held pretty firm against the single European currency, trading two to three cents either side of 1.10 during the second half of last year.
Ms Travella suggests that if you have the cash, try to make an offer by March as good bargains can definitely be found at the moment.
The housing market seems to be the driving force behind any UK economic recovery so these positive announcements can only bode well for Sterling in 2010 where it appears there will be several windows of opportunity to buy Euros significantly above the relatively low levels which have been the norm over the past few months.
As in the UK, mortgages are more difficult to come by, so if you work on 50 per cent loan to value, you shouldn't be disappointed.
If you want advice for areas to invest in for the 1st quarter of 2010, then I would suggest looking at Tuscany, Le Marche and the Lakes of Maggiore and Garda, where good deals can be found if you buy sensibly," adds Ms Travella.
Italy's oldest estate agency International Horizons has predicted that prices for Italian residential real estate will increase by five per cent during the next few months.
The Italian real estate market has not suffered from the crisis as much as other European countries, so there is a chance for rapid recovery here, analysts believe.
Many international analysts have already called Italy as a safe place for investments in real estate this year. This has already resulted in an increase in the number of requests for the purchase of the Italian property from foreign buyers. And, as a consequence, we can expect a rise in prices.
Currently the most attractive places for the purchase of real estate in Italy are Tuscany, Le Marche as well as Maggiore and Garda Lakes.
Unlike other European countries, Italian property prices have remained stable despite the effects of the recession. This is mainly due to the fact that lending in Italy has always had a much smaller scale compared to other EU countries.
Property lending has never been popular in Italy. Most of the Italians usually do not have more than one loan. That's why Italy has never experienced any property "booms" as the other European countries in 1990's.
Homes and Villas Abroad reported that Italian tax changes have reduced house purchasing costs by 10-15 per cent. Combined with the country's ceaseless attraction it means there has rarely been a more opportune time to invest in Italian property. Yet as with any property purchase, especially in a foreign country, there are simple steps to follow to ensure everything runs to plan. The site suggests some handy hints for buying property in Italy:
1) DON'T GET HOOKED ON TUSCANY
Tuscany remains overseas buyers' favourite part of Italy. Yet other areas such as Abruzzo, Calabria and Sicily are far cheaper and also have spectacular countryside and coastlines Try various locations to see what areas you like best. Ensure you are within easy reach of local amenities, unless you deliberately want to be in splendid isolation. And when it comes to visiting potential homes, there is such a thing as too many. Trying to cram 60 into a weekend simply turns into a gruelling slog. By your 25th viewing, chances are you will struggle to recall much of what you have seen so far.
2) DON'T EXPECT CUT-PRICE BARGAINS
Yet Tuscany's picture-postcard allure is undeniable, from the lush rolling hills, vineyards and olive groves of its countryside to historic appeal of its art cities such as Florence, Lucca and Siena. Buying here remains a gilt-edged investment. But bear in mind that apart from a few pockets, such as Garfagnana to the north of the region and Maremma to the south, most of Tuscany is not cheap and in highly sought-after areas such as Arezzo and Siena, you would be doing well to pick up a three-bedroom farmhouse for much less than US$750,000. In addition, don't expect half-price bargains in Italy - discounts of around 10% remain typical.
3) FIND A REALTOR
Getting taken for a ride by some incompetent cowboy could prove costly. Genuine real estate agents must hold a professional licence, qualification and indemnity insurance and be registered with a Chamber of Commerce. Their publicity material and website should show membership of one or more of the following: AICI (Italian Association of Estate Agents), FIMAA (Federation of Mediators and Agents) or FIAIP (Federation of Professional Estate Agents).
4) KNOW WHAT'S RIGHT FOR YOU
Frances Mayes' bestseller Under The Tuscan Sun inspired thousands of overseas buyers to try converting an Italian ruin into their dream home. Great in theory, but be prepared for the hard work and finance it entails. Budget up to Euro 1,000-1,500 per sq m for a total restoration. Whether you go for a fixer-upper or not, avoid taking on more space, land or facilities than you need. A villa with pool set in 10 acres sounds idyllic, but bear in mind the maintenance it will require.
5) USE AN AVVOCATO
For most buyers the Italian process will be unfamiliar, so hire an independent bilingual lawyer (avvocato) with expertise in Italian real estate. Avoid signing documents on your own without knowing what you are committing to. Another consideration: any unpaid mortgages and loans on the house? Plans for a new highway 400 yards away? Was the property built with planning permission? All are vital checks your lawyer will perform.
6) FAMILIARISE YOURSELF WITH THE SYSTEM
After a price is thrashed out the purchaser makes a proposta irrevocabile di acquisto with a downpayment of some 5% to remove the property from the market for around 15 days. If the purchaser's surveyor and/or lawyer are happy with things so far both sides sign a compromesso, in which they agree a timetable for completion. A further deposit is paid, taking the buyer's total downpayment to around 30%. There are heavy penalties if either side pulls out at this stage. The final procedure is to sign the final contract (rogito) in the office of a notary, who scrutinises all documents and sends them with the Land Registry. The buyer pays the balance, usually by bank draft from an Italian bank. Thus he will need to have obtained a fiscal code from tax authorities so he can apply for a bank account.
7) KNOW YOUR COSTS
Taxes, fees, etc, add 7%-10% on top of the price of resale properties and 12-15% for new-builds. Expect around 3% to the realtor, US$210-280 per hour for a lawyer, US$700-2100 for a surveyor and US$2,800-7,000 for the notary.
For new-builds, there is 4% VAT if within 18 months you register for official Italian residency - a relatively straightforward process. Otherwise, 10%. For non-new-builds, the buyer pays 3% of cadastral value if residency is registered for within 18 months. Otherwise, 10% of cadastral value. Cadastral value - often far less than the purchase price - is assigned by the Land Registry based on factors such as floor area, number of rooms, etc.
8) USE A FOREX FIRM
In 2009 the Sterling-Euro rate veered between a low in January of £1/Euro 1.06 and a high in June of £1/Euro 1.19. That means buying a Euro 500,000 home would have cost a UK-based buyer £51,500 more at the start of the year than in summer. Hence the importance of using a specialist currency exchange company, who can fix rates for future deals to safeguard against currency fluctuations. They have far better rates than the typical bank and could in comparison save buyers up to £20,000 on a £500,000 exchange.
9) THINK RENTAL
Will your property primarily be a holiday/retirement home or do you plan to rent it out at some stage? If so, it is advisable to be close to transport hubs. Aim for a maximum hour and a half from an international airport. In big towns and cities, consider proximity to public transport as not all visitors will have access to a vehicle. Properties near a beach rent better and keep their investment value over time because of strict laws on additional construction in areas near the coast.
10) MAKE AN EFFORT IN ITALIAN
Or as the Italians would say: Cercare di parlare la lingua!. Remember that in contrast to Scandinavia, less than a third of Italians know English, one of the lowest figures in Europe. Don't be afraid to make a fool of yourself as your attempts, no matter how awkward, will endear you to locals.
Other movers and shakers
Once again, Spain took the top spot in January's Top of the Props chart. In a direct parallel, the USA took second place once more. Portugal followed in third place, swiftly followed by Italy and France in fourth and fifth places respectively.
Brazil took sixth place with Turkey at lucky number seven. Rounding out January's chart were Cyprus and Bulgaria in eighth and ninth places.
The United Arab Emirates drew a line under January's proceedings at number ten.
December Top of the Props Chart
|
Overall Enquiry Volume for January 2010 |
||||
|
Rank |
Country |
Share |
Change |
Comment |
|
1 |
17.6 |
Non-mover |
1 month in top spot |
|
|
2 |
10.29 |
Non-mover |
|
|
|
3 |
9.88 |
Non-mover |
|
|
|
4 |
5.98 |
Up 2 |
|
|
|
5 |
5.86 |
Up 3 |
|
|
|
6 |
5.59 |
Down 1 |
|
|
|
7 |
4.76 |
Non-mover |
|
|
|
8 |
3.85 |
Up 1 |
|
|
|
9 |
3.77 |
Down 5 |
|
|
|
10 |
2.32 |
Up 1 |
New to top 10! |
|
|
11 |
2.05 |
Down 1 |
|
|
|
12 |
1.88 |
Up 1 |
|
|
|
13 |
1.25 |
Up 7 |
|
|
|
14 |
1.25 |
Down 2 |
|
|
|
15 |
1.15 |
Down 1 |
|
|
|
16 |
0.9 |
Up 6 |
|
|
|
17 |
0.79 |
Non-mover |
|
|
|
18 |
0.78 |
Non-mover |
|
|
|
19 |
0.64 |
Up 2 |
|
|
|
20 |
0.62 |
Up 24 |
Highest climber |
|
|
21 |
0.59 |
Down 2 |
|
|
|
22 |
0.52 |
Up 8 |
|
|
|
23 |
0.52 |
Up 10 |
|
|
|
24 |
0.51 |
Down 9 |
|
|
|
25 |
0.49 |
Up 12 |
|
|
|
26 |
0.46 |
Non-mover |
|
|
|
27 |
0.46 |
Down 2 |
|
|
|
28 |
0.45 |
Down 12 |
|
|
|
29 |
0.42 |
Up 11 |
|
|
|
30 |
0.41 |
Down 6 |
|
|
|
31 |
0.3 |
|
Highest New Entry |
|
|
32 |
0.21 |
Up 2 |
|
|
|
33 |
0.21 |
Down 5 |
|
|
|
34 |
0.19 |
|
New Entry |
|
|
35 |
0.18 |
Up 3 |
|
|
|
36 |
0.17 |
Down 4 |
|
|
|
37 |
0.16 |
|
New Entry |
|
|
38 |
0.16 |
Down 2 |
|
|
|
39 |
0.15 |
Up 2 |
|
|
|
40 |
0.11 |
Down 17 |
Biggest faller |
|
Check out properties for sale in Italy at http://italy.themovechannel.com/
Picture of Lake Como, Italy by wikipedia
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