A new study published by the independent research institute Scenari Immobiliari (Real Estate Scenarios) found that housing sales to non-Italian residents are projected to fall from 106,000 in the two-year period spanning 2018-2019, to 56,000 in 2020-2021.
The main factors behind the decline are a credit squeeze on mortgages brought about by the economic crisis and uncertain employment prospects, Scenari Immobiliari’s president Mario Breglia told the financial daily Il Sole 24 Ore.
Breglia also attributed the downturn to the inability of prospective buyers to visit properties in person for several months during early 2020, when Italy went into strict lockdown.
Travel restrictions didn’t deter all buyers, however, with one UK resident who spoke to The Local last summer going as far as to buy a Piedmont property sight unseen.
Jon Freemon from Cambridge took a risk and put in an offer without visiting his new house after Italy imposed an inter-regional travel ban, beating out hundreds of other hopeful owners who had been holding off until they could see the property.
Buying a place without inspecting it in person isn’t generally recommended; Jon was looking for a holiday home rather than a primary residence, had already done two years of research, and had received a property survey that confirmed there were no structural problems.
The Scenari Immobiliari study focuses specifically on foreign buyers already living in Italy, the majority of whom are long-term residents of at least ten years. Most take out a mortgage, which requires them to demonstrate that they have long-term stable employment – a state of affairs that the pandemic has threatened for many.
The north of the country is by far the most desired location, accounting for 77% of all purchases by foreign buyers, according to the study. Central Italy makes up 19% of the market, with the south and all islands taking just a 4% slither of the pie.
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In a stark contrast to its foreign housing market, Italy’s housing sector as a whole thrived during 2020, with prices rising more than they had in the past decade after a brief Covid-19-induced slump at the start of the year, according to provisional figures from the national statistics office Istat.
The south and Italy’s islands saw the highest level of increased interest from buyers, with prices in these areas seeing a 3 percent jump in the first quarter of 2020 on the same period a year before.
It’s thought that a pandemic-related rise in remote working may be behind the trend, as southerners return to work in their home towns and non-southerners are attracted by better weather and cheaper prices.
Despite what Scenari Immobiliari’s data says, it’s not all doom and gloom for Italy’s foreign housing market: according to current projections, a return to pre-pandemic levels of trading is forecast for 2022.