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ECONOMY

The parts of Italy where house prices keep rising despite the pandemic

Despite the Covid-19 health emergency damaging many sectors of Italy's economy, the nation's housing market has proven resilient - at least in some areas.

Here are the neighbourhoods where Italy's house prices are rising fastest since before the pandemic.
Here are the Italian neighbourhoods where house prices are rising fastest since before the pandemic.

Photo by Tierra Mallorca on Unsplash

Italy suffered one of Europe’s worst economic slumps in 2020, and the nation’s property market – which was already sluggish pre-pandemic – has fluctuated.

Recent studies have shown that house prices are now declining again overall after a brief uptick last year.

But this isn’t the case across the board. Some areas are seeing a huge jump in demand that means prices just keep rising, according to the findings of a new survey by real estate website Idealista.

Considerable price hikes were noted in neighbourhoods on the outskirts of some of Italy’s large cities, as well as around smaller cities which tend to rank highly on ‘quality of life’ indexes.

MAP: Which are the safest parts of Italy to live in?

Idealista described the localised value increases as “the effect of a phenomenon of regionalisation of growth accentuated during the pandemic”.

The survey revealed the top ten areas that have experienced the greatest rebound and noted the factors they have in common.

“They are peripheral, well-connected and able to meet liveability criteria such as environmental quality and the quality of public space, while managing to satisfy people’s expectations of wellbeing,” stated the report.

This evolution in prices shows how the Italian real estate market is “undergoing a profound transformation”, defined as “a fragmentation into many micro-areas”.

The table below shows the top ten fastest growing Italian neighbourhoods, according to the study.

Source: Idealista/Datawrapper.

The province with the districts that has increased their value the most is Milan.

The Turro area of the Milanese city recorded a 44.9 percent rebound compared to the first quarter of 2020 – that is, the one immediately preceding the pandemic.

That places it ahead of Olmi-Muggiano (42.1 percent) and Val di Sole-Fatima (24.9 percent).

This substantial increase in Turro is attributed to the redevelopment of various areas of the district, as well as improvements connected to the university.

A creation of cycle paths that link different parts of the district are also said to have had a strong impact in this area.

In other sections of Milan, such as Olmi Muggiano, the rise in prices is due to the growing importance of the suburbs during the pandemic.

An increasing amount of people turning to remote working, or ‘smart working‘ as it’s known in Italy, has allowed many people to move to less central areas offering larger, more family-friendly homes at much cheaper prices.

READ ALSO: Why now is the ‘best’ time to buy property in Italy

Padua ranks in the top ten list, with two neighbourhoods. Idealista explains that these are two strategic areas for travelling, both by public transport and by private vehicle.

Another province that has seen an increase in some of its districts is Modena, where growth is recorded at almost +25%.

Smart working has changed where people are buying houses in Italy.
Smart working has changed where people are buying houses in Italy. Photo: Persnickety Prints on Unsplash

These areas are thriving due to their proximity to the university, one of the oldest and most renowned in Europe.

“They feature large, newly built apartments in an area that offers greenery and tranquillity, in a strategic position thanks to its proximity to the historic centre,” the report says.

Bergamo, the Lombardy town at the centre of the first wave of Covid-19, also experienced a rise in house prices.

One district called Giovanni XXIII-Stazione saw sale prices rise by 23.6 percent. This growth, which occurred during the lockdowns, “is attributable to the frequent use of smart working by companies”, noted the study.

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It’s claimed that many people went back to Bergamo to work there, but used the good public transport connections to reach other cities in Lombardy when needed.

In central Italy, Arezzo is the province where prices have shot up most this year.

Explaining its popularity, the findings said the wealthy Tuscan town offers employment opportunities but at the same time very quiet, in the heart of the Tuscan countryside”.

Palermo takes the title for southern Italy. As various companies have allowed their employees to work remotely, Montepellegrino on the island of Sicily has been the district of choice.

“This area is well connected by a cycle path and offers the possibility of doing outdoor sports, enjoying a temperate climate,” says the report.

Despite Italy recording its biggest contraction in GDP since the end of World War II during the pandemic, house prices in Italy increased overall last year (by +7% in the first quarter of 2020 compared to the end of 2019).

See more in The Local’s Italian property section.

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PROPERTY

PROPERTY: Should you hire a renovation agency for your Italian home?

If you're renovating a home in Italy, will you need to pay a middleman to cut through the red tape and language barriers? Silvia Marchetti looks at the pros and cons.

PROPERTY: Should you hire a renovation agency for your Italian home?

The idea of snapping up a cheap, crumbling house in a picturesque Italian village may sound appealing – but doing so always comes with tedious paperwork and the hassle of renovation.

For this reason, a growing number of professional agencies have sprung up in Italy to cater to foreign buyers snapping up cheap homes amid the property frenzy.

In many of the Italian towns selling one-euro or cheap homes, there are now ‘restyle experts’ and agencies that offer renovation services handling everything that could become a nightmare: from dealing with the paperwork and fiscal issues to finding a notary for the deed, contracting an architect, surveyor, a building team and the right suppliers for the furniture.

They also handle the sometimes tricky task of reactivating utilities in properties that have been abandoned for decades.

I’ve travelled to many of these villages and looked at this side of the business, too. Hiring these ‘middle people’ comes with pros and cons, though the positive aspects can certainly outweigh the negatives – provided you’re careful to pick the right professionals. 

READ ALSO: Why Italians aren’t snatching up their country’s one-euro homes

These intermediaries are usually locals who have expertise in real estate and a good list of suppliers’ contacts. This allows them to deliver turnkey homes that were once just heaps of decaying rubble, sparing buyers time and money – particularly those living abroad, who then aren’t forced to fly over to Italy countless times a year to follow the work in progress.

I’ve met several buyers from abroad who purchased cheap homes sight unseen after merely looking at photos posted online by local authorities, but then had to book many expensive long-haul flights to hire the architect, get the paperwork done, and select the construction team (a few even got stuck here during Covid).

Thanks to their contacts the local agents can ensure fast-track renovations are completed within 2-4 months, which could prove very useful as the ‘superbonus’ frenzy in Italy has caused a builder shortage meaning many people renovating property now face long delays

Photo by TIZIANA FABI / AFP

Their all-inclusive commission usually starts at 5 percent of the total cost of a renovation, or at 2.500 euros per house independently from its cost and dimension. The fee also depends on the type of work being carried out, how tailored it is and whether there are any specific requirements, like installing an indoor elevator or having furniture pieces shipped from the mainland if it happens to be a Sicilian or Sardinian village. 

However, buyers must always be careful. It is highly recommended to make sure the local authorities know who these agents are and how reliable they are in delivering results.

Town halls can often suggest which local companies to contact, and this gives the renovation legitimacy in my view. In a small village, where everyone knows each other, when the town hall recommends an agency there’s always a certain degree of trust involved and agents know that their credibility is at stake (and also future commissions by more clients). 

Word of mouth among foreign buyers is a powerful tool; it can be positive or detrimental for the agency if a restyle isn’t done the right way, or with too many problems.

READ ALSO: How to avoid hidden traps when buying an old property in Italy

So it’s best to avoid agencies from another village, even if nearby, who come to you offering fast and super-cheap services, or local agencies that are not suggested by the mayor’s office. 

Then of course there can be other downsides, which largely depend on how ‘controlling’ and demanding the client is. 

For those not based in Italy full-time, the most important consideration is: how much can you trust these professionals to deliver what you expect, exactly how you want it, without having to be constantly on the ground? 

Photo by Philippe HUGUEN / AFP

Language can be a major obstacle. There are technical building terms that prove difficult to translate, and if the local agency doesn’t have English-speaking renovation professionals with a track record in following foreign clients it’s best to look for an intermediary with a greater language proficiency. 

I remember meeting an American couple once who got lost in translation with a village agent for days, and had to hire a translator just to hire the intermediary.

It’s always useful to ask for a ‘preventivo’ (quote) with VAT indication, considering roughly how much inflation could make the final cost go up. Buyers should also sign a contract with the exact timeframe of the works and delivery date of the new home, including penalties if there are delays on the part of the agency. 

READ ALSO:

But, even when there is complete trust, I think it is impossible to fully restyle an old home from a distance, contacting intermediaries by phone, emails, messages or video calls only. 

Details are key and there’s always something that could be misinterpreted. Buyers based overseas should still follow-up the renovation phases personally, perhaps with one or two flights per year to check all is going well and up to schedule.

Asking to see the costs so far undertaken midway through the restyle is useful to make sure there are no hidden costs or unexpected third parties involved – like buying the most expensive furniture or marble floor when not requested, or hiring a carpenter to build artisan beds.

While there is really no such thing as a hassle-free renovation, these agencies can ease the pressure and do most of the burdensome work – but buyers’ supervision will always be needed.

Read more in The Local’s Italian property section.

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