Investing in a second house is back in fashion among Italians. Prices are still convenient with returns up to 5%

02 July, Economia & Lavoro

The low interest rates, the convenient property prices and the beginning of the economic recovery made Italians returning to invest in real estate. According to the latest Nomisma report on real estate finance, the buyers looking for a property to buy within 12 months are 2.6 million. It means a potential turnover for 436.9 billion euro, against the 90 billion in 2017. The interesting fact is that the investment component is growing again after a standstill lasted two years, concerning 400 thousand families, namely 15.4% of the potential market for this year. The concept of the second house has changed, especially for those living in a big city. Not only beach or mountain destinations, but also big cities where second houses can be rented as well.

According to an analysis by Facile.it and Mutui.it carried out on sample of over 15 thousand mortgage applications submitted through the two portals between January and December 2017, the applications concerning the purchase of a second property were approximately 7% of the total, having increased from the previous year, while the average value of the properties reached 191,691 euro (+4.7%). The last data from the Revenue Agency confirm the recovery of transactions: between January and March 2018, the sales were 127,777 (+4.3%). The increase allows to recover from the significant losses registered in 2012, but not the prices. These, in fact, are still below the pre-crisis levels and don’t seem to rise again. There are a few exceptions, such as prime properties and those located in the old towns.

Which returns the rental of a second house can grant? Around 4.9%, according to Tecnocasa. The price curve has been calculated referring to the variations of the property prices regarding transactions for the “medium dated” one-bedroom apartment typology (namely properties with characteristics of no particular value but neither cheap built more than ten years ago). The big cities with the highest gross returns are Verona (5.8%) and Palermo (5.5%), followed by Bari (5.1%), Bologna (4.7%), Florence (4.2%), Genoa (5.4%), Milan )5.0%), Naples (4.6%), Rome (4.4%), and Turin (4.6%).

It’s interesting also to note how beach, lake and mountain destinations are going through a revival, having the demand for rentals increased. Prices have reduced since the beginning of the recession (-28.5% for the lake, -34.8% for the beach, -30.8% for the mountain), making the purchase of a holiday house more convenient.

According to Tecnocasa, the most attractive properties are on the Verona-side of Garda lake, which reported the return of purchases by international buyers, as well as Iseo lake. For what concerns beach destinations, the coast of Romagna, Amalfi and Cilento in Campania are the favourites, along with Salento (especially Gallipoli) and the area around Castellammare del Golfo and Scopello in Sicily. Regarding mountain, buyers are particularly interested in Saint Vincent and Champoluc, part of the Monterosa skiing area. Foreigners prefer small villages on the coast and mostly buy old houses spending significant amounts up to one million. Italians, on the contrary, have smaller budgets, around 250-300 thousand euro, preferring apartments not far from the beach and possibly with an external space and a view.

Source: Economia & Lavoro

Translator: Cristina Ambrosi

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