Italy back in recession: good news for property buyers?
Florence, Italy, one of the most popular tourist destinations in Italy Photo: Nadio
Italy's GDP declined 0.2 per cent in the second quarter of 2014, following a 0.1 per cent dip in the first three months of the year. The downturn follows positive figures in the final quarter of 2013, undermining hopes of the start of a recovery.
Indeed, while other countries have slowly seen improvement from the financial crisis, the Italian economy has actually contracted 9 per cent since 2007, its triple fall causing GDP to shrink in 11 of the last 12 quarters.
"At this point, it's probably more accurate to just call this a depression," notes one columnist for The Washington Post.
Agents, though, are feeling optimistic about the Italian housing market.
43 per cent forecast that their country's housing market will improve in the next two years, according to a Bank of Italy survey conducted in May 2014. That figure has jumped from the previous survey's confidence level of 38 per cent back in the fourth quarter of 2012.
Fabio Longo, director at Sankaty Advisors Inc, says that the Italian real estate market has "stronger fundamentals" than other Southern European markets, even though countries such as Portugal and Spain have both seen healthier performances from their economies.
Italy's lifestyle appeal, though, remains strong. Indeed, the World Tourism Organization data shows that international tourist arrivals increased 2.9 per cent from 2012 to 2013, when 47.7 million visitors made Italy their holiday destination of choice.
The ongoing recession, therefore, may spell more opportunities for bargain hunters not concerned with short term economic improvement. Spain's house prices, for example, have plummeted since the market peak, but positive sentiment is high thanks to improving economic conditions and high demand from foreign investors.
Italian property portal Gate-Away.com, which has just joined the AIPP, says that a simila response is already happening, with enquiries up 38 per cent in 2013 compared to 2012 and up a further 4 per cent in the first half of 2014 year-on-year.
The Brits are the most optimistic, says Walter Di Martino, Head of Communications for the site. While the Italian economy was shrinking at the start of 2014, enquiries from the UK rose 24.3 per cent in the first four months of 2014 compared to the end of 2013, while interest in the first six months has jumped 40 per cent.
Mr. Di Martino tells OPP Connect that interest will continue to grow.
"The interest for Italian properties from international buyers (worldwide) is very high and is growing. In the first six months of 2014, the number of Britons who are thinking about a move to Italy has surpassed even that of the perennial front-runners, the Americans, who were first until the end of 2013."
Indeed, on TheMoveChannel.com, Italy's share of activity in July jumped from 3.3 per cent to 4.9 per cent, pushing it up two places into the top five most popular destinations – the country’s second month of rising enquiries in a row.
Dawn Cavanagh-Hobbs of luxury holiday home company Appassionata comments: "Over the last 10 years I've seen Italy experience the good times and the not so good times and it really feels as though the country has turned a corner now."