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PROPERTY

REVEALED: Where in Europe have house prices and rent costs increased the most?

Is it time to buy a property in Italy, Cyprus or Greece? House prices have shot up across Europe in recent years but there are major differences between certain countries.

REVEALED: Where in Europe have house prices and rent costs increased the most?
Italy is one of the few countries where property prices have decreased compared to 2010. (Photo by Nils Schirmer on Unsplash)

House prices have risen by an eye-watering 45 percent, and rents by 17 percent, across the EU since 2010, the latest figures released by the EU statistical office Eurostat reveal.

However, there are major differences among countries. In Austria, house prices have more than doubled and rents have increased by 45 percent compared to over a decade ago. In other countries, they have stalled or declined over the same period.

Greece is a notable example, with prices plummeting by 23 percent and rents by 25 percent between 2010 and 2021.

In Italy, house prices have fallen over overall since 2010 although like much of the EU they have been rising again in recent years.  Rent prices in Italy have registered only a modest increase, while Spain has recorded very small rises in both rents and house prices.

Here is the situation in the countries covered by The Local, according to Eurostat.

Finding a new home abroad?

Between 2010 and the first quarter of 2022, house prices have more than doubled in Austria (+114 percent) and have grown even more in Estonia, Hungary, Luxembourg, the Czech Republic, Latvia and Lithuania.

READ ALSO: EXPLAINED: What you need to know about buying property in Germany

In Germany, house prices shot up by a hefty 94 percent, in Sweden by 92 percent and in Norway by 91 percent.

Denmark (59 percent) and France (29 percent) also recorded double-digit growth.

Spain was the country with the smallest rise, 3 percent, among those countries covered by The Local.

Over the same period, prices have declined in Italy (-10 percent), Cyprus (-8 percent) and Greece (-23 percent).

READ ALSO: EXPLAINED: The hidden costs of buying a home in Italy

According to Italian real estate agency Tecnocasa, house prices in the country are now 29 percent lower than in 2010, even though a slow upward trend started in 2017. Only Milan bucks the trend, with an 8.5 percent increase between 2010 and 2021.

The reasons behind these data, according to Fabiana Migliola, director of Tecnocasa’s research unit, are dwindling salaries and low capital availability, with most buyers being able to afford properties of up to €250,000.

“Of course, a modest growth of real estate and lower prices compared to many other countries inside and outside of Europe make our country attractive to investors,” Migliola said. “This is a phenomenon we have recorded above all in the holiday home market, as 2021 signalled an increase in the number of holiday homes purchased by foreign buyers, especially from the US, France and Eastern Europe.”

2022 could be a year of adjustment, she continued, but rising interest rates could have an impact on buyers who finance their home purchases with a mortgage.

Looking at prices, the agency forecasts a recovery with a rise between 2 and 4 percent, with high demand currently from Italians.

Scaffolding on a high-rise apartment block

Austria has seen the highest average rent increase over the last 12 years. (Photo: Tobias SCHWARZ / AFP)

Where is it cheaper to rent?

Rents have not risen quite as much as house prices, but they have risen steadily since 2010.

Between 2010 and 2022, rent increased by 17 percent on average across the EU. The highest growth among the countries covered by The Local was in Austria, with a whopping 45 percent rise. Denmark (21 percent), Sweden (21 percent), Germany (17 percent) and Switzerland (10 percent) also experienced a double-digit rise.

READ ALSO: Property: How to find a rental flat when you arrive in Austria

Increases were more modest in Italy (7 percent), Spain (5 percent) and France (8 percent).

The highest growth was in Estonia (177 percent), Lithuania (127 percent) and Ireland (77 percent).

On the other hand, in Greece, rents decreased by a quarter over the period, and Cyprus recorded a -1 percent.

The problem of affordability

While average increase rates only give a partial picture of the real estate market, an additional indicator cited by Eurostat is the housing cost overburden rate, the percentage of people spending 40 percent or more of their disposable income on housing.

READ ALSO: 5 of the most affordable places to buy property in France

Despite its plummeting house prices and rents, Greece had the highest rate in 2020, with one in three people (33.3 percent) spending 40 percent or more of their income on housing.

Other European countries with a high-cost overburden rate are Denmark (14 percent) and Switzerland (14 percent).

Just below the 10 percent line stand Norway and Germany (9 percent), Spain (8 percent), Sweden (8 percent) and Italy (7 percent).

Despite the significant rise, Austria has a relatively low-cost overburden rate, at 6 percent.

How has Brexit impacted British buyers?

For British citizens, Brexit may have added difficulties to the purchase of properties in EU locations. Countries such as Austria have specific restrictions for non-EU citizens and where there are no restrictions, higher taxes and new immigration rules may result in fewer British buyers entering the market.

In Spain, it was reported this week that purchases by British residents, which used to make up almost a quarter of all transactions (24 percent), now only account for 12 percent.

However, a recent survey among 900 British buyers found that only 4 percent had given up plans to purchase a property abroad due to the difficulties caused by Brexit and the Covid-19 pandemic. Some 11 percent went ahead as planned last year and 85 percent are still planning to buy.

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This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK.

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MONEY

How you can claim a discount on air conditioning units in Italy

Thinking of installing a new cooling system in your Italian home? Here’s a breakdown of the incentives you might be able to benefit from.

How you can claim a discount on air conditioning units in Italy

With summer 2022 likely to go down as one of the hottest summers in Italian history, it’s safe to assume that many homeowners are looking at buying an air-conditioning system at the moment.

And with energy costs constantly rising, even those who already enjoy the perks of artificially cooled air might be thinking of replacing their old ACs with a brand-new system.

READ ALSO: How to stay out of trouble when renovating your Italian property

Having a cutting-edge, high-efficiency AC unit might make all the difference when it comes to the size of your bollette (bills). Switching from a class B to a class A ++ model can reduce running costs by around 30-40 percent every year, according to newspaper Corriere della Sera.

Regardless of whether you’re installing an AC system for the first time or you’re simply replacing an old unit with a new one, the work is still going to set you back quite a bit. 

The price for the purchase and installation of a multi-split AC generally ranges between 1000 and 2500 euros

But don’t despair (yet). As part of its 2022 Budget Law, the Italian government has made a number of financial incentives (AC bonuses, bonus condizionatori) available to those looking to buy an AC unit for their home.

There are three main ‘bonuses’ homeowners may be able to use. Here’s what you need to know about each. 

Renovation bonus (Bonus Restrutturazioni)

If a new AC system is installed as part of wider home renovation works, part of the cost could be covered by this bonus.

Italy’s renovation bonus grants a 50-percent discount on the total amount spent on renovation-related works, including any expenses associated with the purchase and installation of a new AC unit.

Note that the bonus in question only applies if the purchased AC system has an A+ energy efficiency rating or higher (a breakdown of all available classes can be found here) and if the relevant home renovation works started after January 1st, 2021.

The renovation bonus is only applicable when the total amount spent on renovation is below 96,000 euros.

READ ALSO: From weddings to new furniture: 24 Italian tax ‘bonuses’ you could claim

Scaffolding in Barcelona, Spain

The Renovation Bonus grants a 50-percent discount on the total amount spent on renovation-related interventions, including the purchase and installation of a new AC unit. Photo by Pau BARRENA / AFP

Furniture bonus (Bonus Mobili)

The ‘Furniture Bonus’ also grants a 50-percent discount, this time to works involving the purchase of new furniture and/or domestic appliances, including AC units.

Once again, the discount is only applicable if the unit has been purchased after January 1st, 2021.

The incentive is not available if expenses exceed 16,000 euros for items purchased in 2021 and 10,000 euros for items purchased in 2022. The threshold will drop to 5,000 euros for 2023 and 2024.

Ecobonus

Homeowners can also claim back part of the cost of a new AC unit using the ‘Ecobonus’, which affords a 65-percent discount on construction works aimed at enhancing the energy efficiency of a property.

Any expense related to the installation of a new AC system can be included in the Ecobonus as long as the purchased item is a high-efficiency, heat-pump unit with an A+++ energy rating (the highest available rating).

READ ALSO: Do you have to be Italian to claim Italy’s building bonuses?

Under the current Ecobonus regulation, the maximum amount you can claim back is 46,154 euros. Also, as in the previous instances, the bonus only applies to construction works and purchases made after January 1st, 2021.

How to claim your discounts

There are two ways to claim the above-mentioned bonuses:

  • Through the independent tax declaration form known as ‘Form 730’ (Modello 730). In this case, the amount you’re owed will be divided into 10 equal yearly instalments.
  • Through a discount directly applied to your invoices. This option is only available if the homeowner agrees to pay via bank transfer. 

To avoid any delay in the disbursement of the discount, homeowners are advised to keep a copy of all relevant invoices and bank payment receipts.

Worker carrying out construction works in an apartment.

All of the AC bonuses can be claimed via a 730 tax declaration form and through direct invoice discounts. Photo by Henry & Co on Unsplash

A further bonus: Superbonus 110

Technically, the famed superbonus 110 does not cover the purchase of AC units. 

However, homeowners may be able to enjoy a tax rebate of up to 110 percent of the cost if the unit is installed as part of ‘leading construction works’ (lavori trainanti) aimed at increasing the property’s energy efficiency by at least two classes (or at reaching the highest possible rating). 

READ ALSO: How Italy’s building ‘superbonus’ has changed in 2022

In particular, the replacement of a property’s central climate control system is considered to be a lavoro trainante and the purchase of a unit suitable for both heating and cooling can be included in this category.

The superbonus can be claimed via a 730 tax declaration form and through direct invoice discounts. Additionally, homeowners can also choose to transfer their tax credit to third parties such as tax credit institutes or banks. See further information on the tax agency’s official website here.

Useful links

Renovation Bonus (Bonus Ristrutturazione)
Furniture bonus (Bonus Mobili)
Ecobonus
Superbonus 110

Please note that The Local is unable to advise on individual cases. For further information about claiming tax rebates in Italy, consult your local Italian tax agency office or an independent tax advisor.

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