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Italian property roundup: Record low mortgage rates plus building bonus deadlines

Italian property roundup: Record low mortgage rates plus building bonus deadlines
Photo: Tiziana Fabi/AFP
From low property prices and mortgage rates to more one-euro homes, there’s plenty of good news for house-hunters in The Local's weekly Italian property roundup.

Property prices are no longer rising

Last year, the “pandemic effect” pushed up house prices in Italy overall (by +7% in the first quarter of 2020 compared to the end of 2019).

But after an initial rise, data shows that the price increase hasn’t been sustained – meaning the initial surge in interest in property purchases amid the pandemic didn’t reverse the overall long-term trend of falling prices in Italy.

This is according to a study by mortgage website MutuiOnline.it, which detected only a “brief initial recovery period” in early 2020, which it says was offset by a new decline in house prices in the second half of the year.

The only geographical area of Italy to record an increase in average prices per square meter in 2021 was the islands, with +5% compared to 2020.

Italy has the lowest mortgage rates in Europe

The average mortgage repayment in Italy has almost halved over the last 10 years, meaning people applying for a mortgage now will pay hundreds of euros less a month than they would have just a few years ago. This is due to a record drop in rates by the European Central Bank, according to newspaper La Stampa.

Data from Italian consumer rights association Codacons showed that a mortgage of 100,000 euros over a duration of 25 years for the purchase of a first home in Milan today comes with a fixed interest rate of around 0.98%, with monthly repayments costing 370 euros per month. 

In September 2011, in fact, the fixed rate on the same loan was 4.25%, meaning a monthly payment of 542 euros. Savings are even bigger on variable rates.

Photo: Maria Ziegler/Unsplash

Meanwhile, a study by price comparison websites Facile.it and Mutui.it found that Italy is the European nation with the lowest mortgage rates.

Looking solely at fixed rates, in Europe the second-lowest costs are found in Germany, at 1.18%.

Mortgages in Spain attract a rate of 1.64%, and in Portugal the rate starts from 1.91%. The figure was recorded as 2.30% in Norway and 2.40% in the United Kingdom.In Albania and Greece, borrowers find themselves paying considerably higher rates equal to 3.00% and 3.20% respectively, the report stated.

“Despite some significant differences, as in the case of Albania or Greece, rates in the eurozone remain fairly aligned with each other since all states use the same benchmarks,” stated Ivano Cresto, Managing Director of financing products at Facile.it

“The changes in the rate on mortgages therefore are attributable to competitive dynamics between the credit institutions present in each country.”

“If on the other hand, we look at countries outside the EU, such as the US, where inflation has already started to rise, the rates are higher. If this should also increase in Europe, then we can expect a rise in rates throughout the continent, including Italy,” he said.

Photo: Meejin Choi/Unsplash

Building and renovation bonus deadlines

As regular readers will know, there are numerous government tax ‘bonus’ schemes available to those renovating or rebuilding a property, from the well-known 110% renovation ‘superbonus’ to the furniture bonus. 

Unless an extension is announced, the restructuring bonus, ecobonus, facades bonus, furniture bonus and green bonus are all set to end on December 31st, 2021.

READ ALSO: From renovating property to buying a new car: 28 tax ‘bonuses’ you can claim from the Italian government

The superbonus scheme, which offers a tax rebate on up to 110 percent of the expenses incurred for certain property restorations, meanwhile looks set to be extended as we’ve previously reported. However, this still hasn’t been confirmed. 

As things stand, the current deadlines for those hoping to claim the superbonus vary depending on the type of building on which the work is being carried out

  1. Single-family buildings: deadline June 30th, 2022
  2. Multi-family buildings with 2 to 4 units: December 31st, 2022
  3. Condominiums: December 31st, 2022
  4. Social housing: December 31st, 2023

For more details on the superbonus scheme, see the Italian government website’s Superbonus 110% section. It provides in-depth guidance on who is eligible and the application process, and a host of FAQs.

One-euro homes – made easier?

Italian towns continue to add their names to the list, with many municipal authorities keen to spark regeneration by offering old, unloved properties for sale at the symbolic price of a euro.

While we all know by now that the actual cost ends up being quite a lot higher once fees and renovation costs are taken into account, there are a couple of other issues which can make the one-euro home offers hard to take advantage of.

The process can prove especially problematic if you’re not in Italy and don’t speak Italian well (or at all), since you’ll usually need to deal directly with a local council in a small, remote village with a shortage of any younger residents likely to speak English.

But one town in the sparsely-populated southern region of Basilicata is attempting to make it easier for prospective buyers or tenants to contact property owners directly via its website:  La tua casa a Latronico or “your house in Latronico”. Importantly, the site is also available in English..

We haven’t tested it out ourselves, but if you do use it and end up successfully purchasing a home in this beautiful, lesser-known part of the country, make sure to get in touch and let us know!

Do you have an Italian property-related tip, story or question you’d like to share with us for the next property roundup? Email us here.

See more in The Local’s Italian property section.


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