Should I invest in Italy in 2022-2023?

Should I invest in Italy in 2022-2023? What are the best real estate opportunities in the Italian peninsula?
Those are compelling, momentous questions that many discerning foreign investors and entrepreneurs are asking themselves. This is by far the query we most frequently receive from our clients. 
Buying property in Italy has always been particularly appealing to far-sighted Anglo-Saxon, American, Australian, French, and European investors. It’s not just a remote will, but a cogent fascination that seems to be at once extremely well-grounded and on the rise, notwithstanding the global pandemic-generated financial crisis. 

Is this the right time for a real estate investment in Italy?

The first studies have shown a growing interest in the housing market in Italy during 2022 and 2023. Further in-depth analyses are revealing that the pandemic is currently encouraging and fostering real estate investments in Italy. This is due to a variety of concurrent and synergistic facts that make buying property in Italy all the more fruitful and exceptionally attractive to citizens of the United States and Britain. As Alice Cantor, Bloomberg Wealth, acutely observes: “a range of tax incentives, relatively lower prices and the potential for working remotely has kindled their desire to buy second homes in Italy”,

Italy housing market 2022-2023: what to consider

Bloomberg’s study clearly shows what Italy’s real estate purchase prices look like compared to the swelling ones of other sun-kissed European countries. It does so by presenting enlightening financial evidence brought by leading international real estate actors, including Savills, Knight Frank, Sotheby’s, and the Italian web portal Idealista. Among the data provided, the comparison between the price of an average home in Pavia, a city in Lombardy close to Milan, equal to 123,000 euros, and that of a similarly sized dwelling in Guadalajara near Madrid, 147,300, well exemplifies why so many savvy foreign investors are now focusing on buying property in Italy in 2022.

Buying property in Italy: favorable tax schemes

But that’s not all there is to it. Real estate investments in Italy are also booming thanks to the significant fiscal advantages that foreign buyers can benefit from.

A new approach to capital gains tax

First and foremost, as the Bloomberg study points out, non-resident buyers who choose to sell their Italian property within 5 years of its purchase are not subject to capital gains tax. 

Flat-tax and other beneficial tax regimes

Also, current Italian fiscal regulations provide for tax regimes that can prove to be beneficial. The flat-tax rate scheme applied to short-term rentals is, for instance, a winsome perk for non-resident buyers who aim to make a profit from their investment.

Relocation and Investment in the Bel Paese

On the other hand, today’s flexible business scenario and remote work options make buying property in Italy to relocate a substantial option. It’s also an excellent opportunity for foreign European and non-European nationals to be exempt from the IMU (Imposta Municipale Unica inserire link a pagina interna Irecom) property tax simply by choosing the house they buy as their main residence.

New Bonuses and Opportunities

Last, but by no means least, building regulations in Italy (inserire link a pagina interna Irecom) have been restructured in recent years, and new temporary bonuses have been introduced. Let’s make an example – the Italian government has recently extended the 110% Ecobonus, a building opportunity intended for renovations carried out to improve energy efficiency and provide anti-seismic implementations – to June 30, 2022 (but there are voices confirming a further extension). Renovating property in Italy has never been more worthwhile.

Why you need local insight to find the best places to buy in Italy

Surveys, studies, and market trends show that investing in Italy, in real estate, is bound to be the up-and-coming financial venture for 2022-2023. But which Italian destinations should one focus on?

Tips to discover what are the best places to buy a rental property in 2022

Discerning investors well know that location is key, and that deciding where to buy a house in Italy is a pivotal and weighty decision. A decision that needs to be pondered carefully and scrutinized in depth. 

1. Question your inner desires

The great majority of foreign investors, including most of our most discerning clients, know Italy well and have traveled from North to South both for business purposes and on vacation. Unfortunately, however, knowing one’s way around the Italian boot is not enough if one is looking to identify the best places to buy in Italy. 

2. Connect with a network of professionals

Having a team of locally-based professionals to assist you as regards where and how to buy real estate in Italy is a vital prerequisite. A local expert, in fact, facilitates your search by offering added insight and a widespread network of contacts, and helping you become familiar with the different areas’ real estate markets and their current trends. 

Buying property in Italy in 2022-2023: an overview of the current Italian housing market scenario

What farsighted foreign investors really want to know, before deciding whether and where to invest in Italy, in real estate, is what the market is looking like right now, and what happened in the recent past. 

So, here we go with fresh data, numbers, and trends as regards the current times and the last few years. 2021 was the second year of the pandemic and one of the worst performance years in the modern economic era. According to the same year Jones Lang La Salle survey, Italy’s real estate market showed a positive trend both for residential and non-residential property.  As reported by Idealista, based on the Italian Revenue Agency’s official survey, Q1 2021 housing transactions recorded a 38.6% increase compared to 2020, soaring so high that they managed to beat Q1 2019 trades by over 24,000 units. Between April and June, the total number of deals hit 201,492, with the number of home purchases and sales increasing by 73.4% compared to the previous year. Hence the surge in Q3 2021, with transactions up 21.9% compared to the same quarter in 2020, came as no surprise. 

The fabulous news? This positive trend pertains to the whole of Italy, showing the highest increase rates in the center’s main cities, where the number of successful transactions reached a rate of about 30%. All in all, numbers show a truly encouraging growth momentum.

Best places to buy in Italy: a comprehensive 10 bullet points list

1. Sicily
2. Tuscany
3. Sardinia
4. Lombardy
5. Latium
6. Apulia
7. Veneto
8. Umbria
9. Emilia-Romagna
10. Piedmont

Buying property in Italy: what financial analysts say

The above bullet list provides an easy, quick and straight-to-the-point rundown of the regions, i.e. the macro-zones (or macro-areas), that financial analysts deem to be the most interesting for real estate investments over this year, 2022, and throughout 2023.

All Italian regions offer a variety of manifold attractions

Where is the best place to buy property in Italy? Truth be told, every area of Italy has its very own distinctive character, its landmarks, attractions, and unique cultural legacy (and even its own delicious flagship recipe!). Hence, in a general sense, every single Italian region provides at least 5 great reasons to choose it as a location for one’s real investment.

Where is the best place to buy property in Italy? Great opportunities via judicial auctions

This said, buying property is a crucial step, and needs to be based on careful economic evaluations. The main issue savvy buyers face is: where is it convenient to invest today? From this point of view, good opportunities can often be found checking out the properties on auction. In Italy, in fact, judicial auctions frequently provide a choice of extremely cost-effective options.

Italian auction sales data 2021- area by area

Reliable data on real estate sales via judicial auctions comes from the AstaSy Analytics Study Center of NPLs RE Solutions. The Center’s last report published provides straightforward information and detailed figures on the real estate auction sales pertaining to 2021. The study clearly shows a significantly higher number of properties up for auction in Northeastern Italy (up to 42.15%) than in Central Italy (27.75%), while Southern Italy had only 14% of the total and the major islands only 12%.

Properties up for auction in 2021-2022 region by region

To provide more information, the study also presents interesting region by region data. Those data reveal Lombardy to be the leading region, with 18.63% of the total Italian real estate units up for auction, followed by Sicily (9.95%), Latium (7.64%), Tuscany (6.82%) and finally Veneto (6.72%). 

The next step is to analyze the above information alongside more details about each region, specifically prices per square meter. This will certainly be useful to those prospective buyers who still have doubts on which region to focus on for their real estate investment.

Where to buy a house in Italy: prices per square meter

Looking at prices, precisely prices per square meter, is certainly one of the most straightforward and substantial ways to start focusing on buying property in Italy. Selecting where to buy one’s house in Italy largely depends on purchase prices, alongside personal preferences and the investment’s overall aim.

Prices per square meter region per region

Let’s start by looking at the latest data published by Idealista, one of Italy’s leading real estate portals. The following figures are per region and updated in Q1 2022.

Sicily

As of January 2022, the average real estate prices demanded for residential properties located in Sicily stood at €1,119 per square meter, showing a decrease of approximately 4.,28% compared to January 2021.

Tuscany

In January 2022, the price per square meter for houses in Tuscany ranged from €1,455 to €3,076 per square meter. The average price requested for properties for sale was the lowest price was in the province of Arezzo, average of €1,455 per square meter, and Pistoia, average of €1,480 per square meter.

Sardinia

Beach-lined Sardinia follows Tuscany closely, showing an average price per square meter of residential real estate units of €2,211/m². With a range that goes from a minimum of €1,103/ to a maximum of €2,647 per square meter. The Sardinian homes for sale in the province of Oristano showed the lowest price: €1,103 per square meter.

Lombardy

In January 2022 the average price demanded for residential properties for sale in Lombardy was €2,121 per square meter, increasing by 4,74% compared to January 2021. It comes as no surprise that the most expensive homes are in Milan (quoted at €3,302 per square meter).

Latium

Latium, instead, showed a significant decrease in the prices of residential real estate for sale: €2,422 per square meter in January 2022 against €2,458 in the same month of last year. Again, it is not surprising to find higher property prices in Rome (average of €2,701 per square meter).

Apulia

Beautiful sea-fringed Apulia is very much sought-after nowadays, and the property prices show it: in January 2022 the value of residential properties for sale increased by 0,23% compared to January 2021, reaching an average price of €1,286 per square meter.

Veneto

Veneto is on the rise too, the study reveals. In fact, housing prices went from €991 per square meter in the province of Rovigo to €2,495 in the province of Belluno, and Venice followed expensively close, with €2,321 per square meter.

Umbria

Also known as “the green heart of Italy”. Over the month of January 2022, the highest selling price for properties for sale in Umbria was in the province of Perugia, the region’s capital, with €1,162 per square meter. Conversely, the lowest price, €1,045 per square meter, was in the province of Terni.

Emilia-Romagna

Emilia-Romagna is another Italian region where prices for houses seem to be rapidly escalating. In January 2022, the average price of residential properties for sale was €1,824 per square meter, showing an increase equal to 1.73% compared to January 2021.

Piedmont

As of January 2022, the highest selling price for real estate in Piedmont was recorded in the province of Verbania, with an average of €1,754 per square meter. On the contrary, the lowest price was in the province of Biella with an average of €605 per square meter.

The bottom line on current real estate prices in Italy

As the above shows, real estate markets trends show a significant increase in cost prices per square meter, especially in Northern Italian cities. As regards the country’s cities, Immobiliare.it, another leading Italian real estate portal, foresees the following increase percentages for five of the largest:

• Turin +5,3%
• Milan +4.2%
• Bari +1,8%
• Bologna +1.2%
• Rome +0.3%.

In a nutshell, what the latest surveys show is that Milan will probably continue being the most expensive city in Italy, whilst prices per square meter will seemingly hit €1.994 in Turin. Southern Italy, and a few cities and areas in the Central part of the country, will apparently be among the best places to buy in Italy in 2022-2023. In detail: Naples, Palermo, Catania, and Genoa will provide significantly cost-effective housing options, and, surprisingly enough, prices per square meter will probably decrease both in Florence (-3.6%) and in Venice (-2.1%).

Italy Housing market 2022-2023: learning from the past years’ data

Knowing the facts about what happened in the residential property market in Italy between the end of 2019, the last “season” before the pandemic, and 2021 is important. It can help us understand what the current scenario looks like, and partly foresee what lies ahead.

The Gabetti Group’s point of view

According to the highly valued data from the Gabetti research office, the data from the first semester of  2021 shows a significant growth, equal to approximately 20%, compared to the same period of 2019. Looking at these promising figures the Gabetti Group’s GM Marco Speretta remarked that he “expected a further increase in purchases and sales, especially thanks to the support offered by the government-issued incentives, such as tax benefits and 110% Superbonus“.

The promising turnover of 2021

As the portal Scenari Immobiliari points out, the year 2021 ended auspiciously for the real estate market, with a positive turnover equal to over 123 billion euros, which revealed an increase of 8.7% compared to 2020. All in all, a very good upswing that, experts show, was largely driven by the increase (+ 10 points) in purchases and sales of residential properties, and especially by the significant growth, both number-wise and value-wise, of transactions involving large, prestigious luxury apartments. 

The forecast for 2022-2023

According to the experts, Italy’s real estate scenario will keep last year’s positive trend up and show excellent turnovers in 2022 and 2023 as well.  As Dario Castiglia, CEO & Founder RE/MAX Italia remarks, “the government incentives, alongside newly acquired habits such as remote working, will encourage people to focus on purchasing quality real estate, hence boosting the number and size of overall transactions.”

Buying property in Italy: new opportunities coming from the renewed suburbs

Where will this promising future trend lead us? Possibly, probably, to a nice house in a pretty neighborhood in the suburbs. It appears, according to the experts of Il Sole 24 Ore, that a novel combination of low-interest mortgages, renovation bonuses, and a desire to enjoy a more sustainable lifestyle is encouraging prospective buyers to purchase older homes in suburban areas. This could, indeed, accelerate redevelopment in a number of attractive outlying areas that are, as of today, already undergoing substantial renovation processes as regards transportation and services.