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PROPERTY: House prices continue to rise in Italy amid pandemic

The average price of homes sold in Italy rose again in the last quarter, new data shows, continuing the pandemic's shakeup of the Italian property market.

A house in Monza, Italy.
Both the number and the value of property sales in Italy has increased. Photo by Valentina Locatelli on Unsplash

The average price of property purchased for housing or for investment increased by 1.2 percent in the third quarter of 2021 (ending in September) compared to the previous quarter, and by 4.2 percent percent compared to the same time last year, according to new preliminary data from Italian national statistics agency Istat.

READ ALSO: The cheap Italian properties buyers are choosing instead of one-euro homes

While a relatively modest increase, this confirms a continuation of the trend of rising house prices in Italy amid the pandemic following a brief lull over summer.

Italy’s first major jump in prices for years was recorded at the end of the first quarter of 2020.

House price changes by quarter, 2015-2021. Source: Istat/Idealista

Until the end of 2019, Italy had been one of the only countries in the European Union recording stagnation and decline in property prices.

Industry experts said at the time that average property prices in the country were being weighed down by the high number of old, neglected properties on the market which were proving difficult to sell.

Since then, the introduction of Italy’s ‘110% building bonus’ as part of the post-pandemic economic recovery plan has stimulated interest in the purchase of old buildings in need of serious work.

And of course, since 2019 a growing number of Italy’s remote towns and villages have famously begun selling off old, crumbling houses for the symbolic price of one euro.

READ ALSO:  How can a non-EU citizen get a mortgage to buy property in Italy?

Still, Istat noted that new homes continue to drive much of the rise in prices in 2021, with a 3.3 percent rise, while the price of existing properties rose by 1.8 percent.

‘Index of prices of new and existing houses’ for 2010-2021. Source: Istat

The agency said the figures were recorded “in the context of lively growth in sales volumes”, with the number of property purchases in Italy up by 21.9 percent on the previous quarter according to Italy’s Revenue Agency (Agenzia delle Entrate).

Low interest rates coupled with stable house prices created favourable conditions for buyers in Italy earlier in 2021  while the Italian government also began offering financial aid for first-time buyers from June.

 
Property search portal Idealista recently published the findings of a new survey saying some areas of Italy are seeing a huge jump in demand.

Idealista said the Italian real estate market is “undergoing a profound transformation” in pandemic times and is now seeing  “a fragmentation into many micro-areas”.

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.

See more in The Local’s Italian property section.

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PROPERTY

Why towns in Italy’s Salento are offering new residents up to €30,000

As if the sunny south-eastern tip of Italy wasn’t enticing enough, towns in Salento have now announced big cash incentives for people moving in. Why is this needed, and what’s the catch?

Why towns in Italy’s Salento are offering new residents up to €30,000

Another town in southern Italy has joined a long list of depopulated areas which are trying to offload old, unwanted houses at bargain prices and offering cash incentives to new residents.

The municipality of Presicce-Acquarica, which is made up of two adjoining villages, has announced it will soon offer grants worth up to €30,000 to those willing to relocate there.

READ ALSO: The cheap Italian properties buyers are choosing instead of one-euro homes

No doubt the offer will be tempting to anyone who has visited the sunny Salento area, in Italy’s south-eastern Puglia region.

Salento sits right at the bottom of the peninsula that forms the heel of the Italian ‘boot’. It’s a highly popular summer tourist destination known for scorching temperatures, sprawling olive groves, whitewashed houses and long coastlines dotted with wild, pristine beaches.

With its famously abundant local produce, warm climate and authentic, traditional feel, Puglia (and Salento in particular) is an increasingly popular destination for foreign second-home buyers as well as holidaymakers.

The Italian region of Puglia is known for its unspoilt landscapes and agricultural traditions. Photo by Mathilde Ro on Unsplash

But the newly-announced incentives are aimed more at those who would become full-time residents, as the council hopes to attract young families and people planning to start a business.

Those moving to the villages of Presicce or Acquarica must be willing to invest in an older property in the area, and the council says it will subsidise 50 percent of the cost of a property purchase and any renovation work up to a maximum of €30,000.

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

Houses for sale as part of the deal are reportedly priced from around 500 euros per square metre, meaning you could buy a 50-square-metre property at around €25,000.

Like other cheap or one-euro homes on sale across Italy, the eligible properties have long been abandoned and are likely to need significant renovation work.

The location of Presicce-Acquarica at the southern tip of the Puglia region. Image: Google Maps

To be eligible for the grant, the council says individuals or families must move their official residency to the town – which would require being a full-time resident in Italy, to begin with, something which could prove problematic for those who would need a visa, or who only want to spend part of the year in Italy.

And buyers would have to be sure about their decision, as the town hall is expecting them to stick around.

“The maximum sum of 30,000 euros is envisaged only if the buyer decides to move their residence for at least 10 years after the purchase,” Mayor Paolo Rizzo said, according to newspaper Corriere della Sera

The municipal council has already launched several incentives to attract new residents, including tax breaks for business start-ups and ‘baby bonuses’ for families with children.

After just 60 births compared to 150 deaths last year, the town hall says it will also grant new resident families €1,000 for every baby born there.

READ ALSO:

The municipality now has around 9,000 residents, around half of whom live in the old town, where the properties for sale are located.

But attracting new families to this sleepy area may prove a considerable challenge: like many other parts of Italy trying to reverse population decline with generous-sounding incentives, Puglia’s villages often have little public transport infrastructure, scarce public services, and limited employment opportunities.

Many villages in rural Puglia have an older population and are struggling to retain younger residents. Photo: Rich Martello/Unsplash

Perhaps the council is relying on the area’s outstanding beauty to tempt new residents: Presicce-Acquarica is designated as one of Italy’s ‘most beautiful’ villages, with a historic centre filled with ornate churches and Baroque palazzi.

The town is nicknamed the “city of green gold” due to the high quality of the oil from the surrounding olive groves, and it’s only a short drive from the Ionian Sea and the popular tourist destinations of Gallipoli and Santa Maria di Leuca.

The full details of the scheme and application process have however not been finalised yet, and will be published on the town hall’s website in the coming weeks, according to Italian media reports.

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