In Italy, investment in real estate continues to be one of the main features of financial activity. The stock market in Italy is relatively small and has been plagued by a series of difficulties that left shareholders suspicious and reluctant to invest. Investors in Italy have traditionally operated in the real estate market. An amazingly large share of the population owns their own homes, and many purchase second homes for vacations. In addition, many foreigners purchase real estate in Italy because of the attractive living conditions in many areas. For example, there are large colonies of foreigners living in Tuscany, Umbria, the lake areas of northern Italy, etc. While the purchase of real estate might be considered a “consumption expenditure” rather than an investment, surprisingly enough the value of real estate in Italy has given great satisfaction to investors as a result of the steady and often rapid increase in values. In recent years, the increases in values have been well ahead of rises in the cost of living. It may be expected that real estate values will continue to rise because of the strong underlying demand, both from domestic as well as external sources.
Obviously, for the purpose of investing in real estate there are various factors to be considered: in particular, location is important. For investment purposes, it is certainly more advisable to purchase a relatively expensive property in a good location, rather than a cheaper property that is located in a less attractive area. There will always be a market for showpiece properties and because of the dwindling availability of such properties, their prices will continue to advance sharply. Another factor to be taken into account for the purpose of investing in real estate is the potential that the property might have for resale or for commercial use once it has been renovated.
There are still large numbers of properties for sale in Italy that are located in beautiful rural areas or in small hill towns that have been abandoned by the local residents who have moved to larger urban areas. These abandoned properties are often sold at very modest prices, and with renovation can greatly increase their values. Throughout most of Italy, particularly in the center and north, local administrations are awakening to the benefits of improving the attractiveness of their areas to encourage tourism and the expansion of local commercial and hospitality sectors. www.fdmre.com