As people get ready for the first true post-pandemic holiday season, all eyes are on the Mediterranean. Whilst Spain and Portugal will obviously be at the top of many people’s lists, Italy offers an excellent and lucrative alternative. Here are a few reasons why buying property in Italy and its benefits.
The magic of Italy
First and foremost, Italy fulfils the first requirement of foreign property investment: it offers the prospect of an exceptional place to visit and live. With a warm climate, spectacular scenery and historic hilltop town, it is a country that has a lot to offer. The food and culture are second to none, and the locals can guarantee a friendly welcome.
Today, Italy is the fourth most visited tourist destination, with over 96 million visitors each year. Worldwide renowned, Italy attracts tourists from many continents and is easily accessible from all over the world with a wide variety of direct flights arriving into major cities such as Rome, Venice and Florence, making it a popular short break destination. Additionally, bordering France, Switzerland and Austria, Italy is also ideally situated to serve a large northern European tourist market.
This tourist industry growth is also directly related to the increase in low-cost airlines now serving the country, sparking a fresh wave of tourists and making holiday homes and buy-to-let investments more popular than ever.
Stable economy
With a GDP of $1.99 trillion, Italy is the eighth-largest economy, expected to expand to $2.26 trillion by 2023. And as a member of the EU and the European Economic & Monetary Union (EMU), the country offers a well established, strong economic climate in which to invest. Italy is also a member of the G8, consequently ranking among the world leaders. Ultimately, these factors help further increase investor confidence in the country as a safe and stable economy in which to do business.
Growing market
Italy is a rapidly growing holiday market. Whilst some of the top destinations in the north, such as Tuscany, are already well established, other lesser-known locations are already up and coming. Umbria, for instance, offers all the benefits of an Italian holiday hotspot but with a much lower entry price.
According to IPD (Italian Property Index), in the five years between 1998 and 2002, Italian property prices increased by around 40% (an average of 7% per year). And over the past ten years, property values in Italy have risen steadily in highly valued regions such as Tuscany, Florence and Rome, where capital growth has reached around 10%, showing strong market growth.
The country is now seen as a viable alternative to Spain, France or Portugal, and as a result, the Italian property market is increasingly appealing.
Affordable prices and lucrative returns
Italian property prices remain relatively low compared to many other EU destinations, and capital gains tax is not levied on the profits of the properties. Therefore, it is a significant incentive to many investors, allowing them to maximise their return on investment.
The increased worldwide exposure of Italy has also had a positive effect on its property market, leading to a further explosion in tourist numbers. Meanwhile, the interest from investors wishing to purchase a property in cultural cities or the coast of Italy continues to stimulate its strong rental market, which is currently providing rental yields of over 5%.
With property prices still low compared to many other Mediterranean locations, some areas of Italy are establishing themselves as promising new investment opportunities. And whilst property in some of the better-known regions will be more expensive, they still offer excellent rental income and further capital gains.
Discover more in our Tuscany destination guide,
and contact us for information on real estate opportunities in Italy.
