With its appealing climate, breath-taking scenery, legendary cities and high quality of life, Italy is one of Europe’s most popular destinations for vacations and second homes.
Tuscany, in particular, attracts local and international visitors in huge swathes. It is one of Italy’s most visited regions, famous for its diverse landscape shaped by stretching coastlines, elegant vineyards, and the rugged Apennine Mountains. Tuscan cities like Florence and Pisa are also a main draw for tourists.
But a beautiful country isn’t enough to draw investors to the scene. A stable property market in Tuscany is attracting foreign buyers, with comparatively low property prices, solid rental yields and tax incentives.
Comparing Italy to other EU countries
According to recent data from Eurostat, house prices across Europe have increased by an average of 45% from 2010 to 2022. In Italy, however, house prices have decreased by 10 per cent. The country was one of three EU member states to experience a negative house price growth, alongside Cyprus and Greece. This makes properties in Italy a comparatively good deal, with low prices and plenty of room for growth.
House prices have been on a steady upward trajectory over the last couple of years, making now a good time to invest. In 2021, luxury house prices in Italy registered their strongest rate of growth since the financial crisis. House price growth reached an all-time high of 5.2% in the year to June 2022, according to CEIC Data. (Prices also grew by 4.5% from the second quarter of 2021 to the same period in 2022.)
As Italy’s housing market finally starts to gain momentum, Europe’s house price boom is showing signs of a slowdown. With house prices forecast to fall in major European countries, Italy’s sudden rebound in house price growth has come at the right time.
Furthermore, the Italian economy has recently been in the spotlight for its post-pandemic recovery, and the government is also taking action to attract foreign investment. Notably, the country’s “flat tax” incentive—designed to attract the global rich—enables domestic and international residents to pay a capped amount of €100,000 in tax per year on their global assets and income.
Why should I invest in Tuscany?
House prices in Tuscany remain strong; in 2021, Lucca, Val d’Orcia and Florence registered a growth of 6%, 4% and 3% respectively.
According to the Idealista Price Index, homes in Italy cost an average of €1,820 per m2 in August 2022, whilst Tuscan properties cost an average of 2,348 €/m2. Despite having one of the highest prices per square metre, Tuscany continues to be the number one region for global buyers. People are simply willing to pay more for property in this region, and who can blame them?
Last year, Knight Frank recorded an annual 30% increase in enquiries for Tuscan homes, and Tuscany accounted for 66% of all enquiries for Italy. Buyers are keen to get their hands on villas with gardens or terraces and with private beach access, and prices are expected to remain stable as new in-demand developments emerge.
For those looking to make a profit, the average overnight prime rental price in Tuscany stands at €471, according to Engel & Völkers. This makes rental properties in the region extremely profitable.
Tuscany is a well-established tourist destination, with an economy on the up, and attractive returns on investment—making acquiring property in the region all too tempting.
Love Tuscany? Contact us today to reserve your dream home in Italy.
