Italy is the dream destination if you’re seeking rich history, stunning landscapes and sunshine filled days. And if you’re thinking of investing in Italian property, you’re spoilt for choice. From city hotspots to large, open farmhouses in sprawling countryside, the type of property you choose can offer impressive rental returns. So, let’s look at some reasons why investing in Italy is a great idea for foreign buyers.
Why Choose Italy?
The Italian lifestyle is all about balance. Working hard and enjoying life go hand in hand. So, if you’re thinking about buying a property for your golden years, then it’s a great country to consider. Plus, the healthcare system in Italy is rated as one of the best in the world .
Regarding long-term investments, Italy also offers the advantage of a secure and stable property market. Although general growth in the economy has been slow, property prices have been increasing over the last few years , which is great if you plan to hold onto your purchase for a long period.
Here are five more advantages of buying property in Italy :
- Whether you want to expand an existing portfolio or you’re thinking about buying a retirement property for your future, Italy offers many options with little to no restrictions on purchasing as a foreign buyer. The main condition is to have an Italian tax number. An Italian bank account is also helpful for ease of borrowing.2. As one of the top ten global economies , you can feel safe in the knowledge that your investment will offer you a positive return both in rent and resale when the time is right.3. Ranked as one of the most popular travel destinations in the world , Italy’s tourism trade is fast and furious. With millions of visitors  pouring into its stunning cities and ambling through the sprawling countryside every year, investing in a holiday rental could offer a healthy supplemental income.4. Italy’s economy and housing market are ideal for long-term investors due to a slow, yet upward trend in economic growth and purchase prices.
5. When it comes to connectivity, Italy has it all. With 77 airports  dotted around the country, it’s a short flight from most Eurozone countries, including the UK.
The Italian Property Market
As a foreign investor, understanding the market in which you plan to invest is key. Just like the rest of the world, Italy’s market needed a recovery period after the pandemic, however since then it’s shown signs of growth – albeit low levels.
In terms of the property market, some regions have recovered better than others. According to Italian property portal, Immobiliare, in December 2023, residential properties averaged around €1,974 per m2. This was up by 1.6 per cent as of the previous year . Some regions, such as Liguria and Trentino were priced much higher per m2 (over €2,500) whilst areas in the South of Italy were around €1,200 per m2.
This regional price fluctuation demonstrates the need to research and get to know the area in which you invest.
- Whilst prices are generally on the up, this has been slow throughout much of the country. However, tourist spots such as Florence and Rome have shown a consistent growth in property prices and experience high rental demand.
- Demand from Italian nationals is currently quite low, which could point towards more favourable conditions for foreign buyers.
- The Italian government has introduced incentives to attract foreign investment.
- Borrowing has become more expensive, just like most European countries. This is due to inflation and slow growth.
|Good to know :
|Our iad Overseas consultants are based in Italy and fluent in both Italian and English. They can help you make the right decision when it comes to what region is right for your investment.
Government Initiatives to Attract Investment
With the Government keen to boost the economy and housing market, there have been some widely publicised schemes to attract foreign investment.
A Focus on Sustainability
The Government is trying to promote the sale of older buildings dotted around Italy. Not only does this preserve Italian heritage, but it is also considered more environmentally friendly than building new properties.
In light of this, one of the most well-known Government schemes is the ‘Case a 1 Euro’. This is where buyers purchase a dilapidated property for as little as €1 in certain regions (mainly in Southern Italy).
The aim is to try and retain as much history and culture as possible by restoring old properties to their former glory. However, it’s worth noting, projects such as these are not for the faint hearted as renovations, taxes and legal fees can drive costs much higher.
The Government has tried to offset the costs of such projects by offering renovation bonus schemes and tax reductions. If this is something you are interested in, it is important to speak to a property specialist to see how such schemes apply to foreign investors.
The Government has introduced various tax incentives for foreign investors looking to reside in Italy or for foreigners choosing to retire in Italy who receive a foreign pension. Property tax relief schemes have also been introduced for people who transfer their residency to Italy.
Speak to our iad Overseas consultants* to find out if you may be eligible for any of these Government initiatives.
Property auctions are on the increase in Italy and buyers can find deals for up to 10 per cent less than the open market value . As a foreign buyer, if you’re not familiar with the auction process, it is strongly advised you look for professional assistance to ensure you know exactly what you’re getting into.
Rental Yield in Italy
Whether you’re buying a holiday let or a long-term rental opportunity, Italy’s rental market is strong and demand is high. Rental prices have been increasing since the pandemic and last year the average rental yield of a house was valued at 8.8 per cent – up by 1 per cent from the previous year .
On average, residential rents have increased from €11.95 per month per m2 in December 2022 to approximately €12.90 per month per m2 by December 2023.
Check out the table below to see how rental prices differ between regions.
|Average monthly rental price for residential properties in Italy 2023 per m2
*Data taken from Statista.
The mountainous region of Aosta Valley, known as the “Rome of the Alps” commanded the highest rent per m2. Loved by winter sports enthusiasts, there is also lots to see for those with an interest in history and art.
Lombardy (northern Italy) and Tuscany (central Italy) also command high rental returns. Be aware that tourism in these areas is seasonal, so short-term lets may experience extended periods without tenants.
A large percentage of Italian nationals own their own properties, which tend to be kept within the family. So, whilst there is demand for rental property, as an overseas investor looking for a high return, you may find holiday lets to be more profitable.
According to short-term rental specialists Your.Rentals, short term lets in Italy are a big business. Cities such as Rome and Milan offer monthly rental revenues of more than €2,100 and an occupancy rate of between 75 to 94 percent .
Regional areas such as the Amalfi Coast and Tuscany also offer a strong seasonal rental demand, whilst Sicily is also a good contender for holiday properties.
In recent years, the city of Florence has brought in strict rules about short-let properties, so make sure you have investigated any restrictions before you decide to invest.
Off the Beaten Track
If you’re looking to invest outside of the major cities, yet still appeal to tourists, here are our top three regions to investigate.
1. Le Marche in central Italy is near Tuscany and Umbria. This rural area feels largely untouched by the modern world and is surrounded by lush countryside and rolling hills. It is home to a large community of expats and properties start at around €200,000.
2. Southern Italy is ideal for travellers looking for a truly authentic Italian experience. Whilst rental prices in Sicily and Puglia are less than most northern and central regions, the purchase prices are also lower – so you can get far more for your money.
3. The Lakes are loved by the rich and famous, so if money is not an issue and you want to splash out on a luxury villa, this is the destination for you. It’s worth looking around less popular areas such as Isea and Trasimeno if you’re on a tighter budget but love lake life.
How iad Can Help You
iad Overseas has consultants based in 8 different countries, including Italy. So, if you’re considering investing, our agents are here to help. They are fluent in English and Italian and will be able to support you throughout.
We will help you find your dream investment in the right region of Italy and for the right price. We offer value for money, useful advice, and a network of professional contacts.