Residential property prices in Italy’s main real estate market have fallen by around 30% since the second quarter of 2008 but the luxury sector has proved more resilient, according to a new insight report from Knight Frank.
Prices have softened by around 20% in some luxury markets but a weaker euro in the first half of 2012 provoked interest from more non-Eurozone buyers and demand for properties above €3 million is holding firm.
Traditional buyers from the UK and the United States are now competing with those from Scandinavian, Russia and the Netherlands.
Knight Frank’s Global Property Search website generates around 700,000 hits per month, and an analysis of searches undertaken between January and August 2012 showed that Sardinia had seen the largest rise in property searches, followed by Venice.
Comparing with the same period in 2011 property searches by Danish and Swiss nationals increased the most, by 28.5% and 23.4% respectively. The figures also shows that Greek residents searched for the highest priced properties between January and August, on average homes priced at €3.8 million.
In Sardinia 84% of property searches related to homes above €5 million while in Tuscany and Umbria, online search activity is more evenly split with 55% of searches relating to homes below €5 million and 45% above €5 million.
The report says that the decision by buyers to return to familiar core markets in the wake of the global recession has reaffirmed Lake Como’s status as the Italian lake of choice for foreign buyers.
Prices have held firm in the last 12 months due in part to the flight to quality trend displayed by buyers, both in terms of location and property type, but also due to its geographical position.
Prior to the financial crisis, prime prices in Venice were slightly inflated which has meant values in the city have had further to fall. Prices are now 10% lower than at the start of 2012 and around 30% lower than their peak in 2007.
‘We believe a floor has now been reached and activity will strengthen in the remainder of 2012 with the potential for price growth, albeit marginal,’ said Kate Everett-Allen, head of Knight Frank’s international residential research team.
Foreign buyers continue to target the popular areas of San Samuele and Dorsoduro with French, Swiss, Austrian and Italian buyers the most evident in 2012.
The report also shows that Tuscany, particularly locations such as Chianti and Val d’Orcia, continue to appeal to an eclectic mixture of buyers seeking their Italian idyll.
In Florence, the city centre apartment market has been sluggish in 2012 but this has been counterbalanced by a more active villa market within the Florentine hills and strong interest in the Castelfalfi development in Tuscany. In Umbria, the Niccone Valley, close to the Tuscan border, is attracting the most interest particularly from northern European buyers.
Demand for second homes on Sardinia’s exclusive Costa Smeralda increased at the end of 2011 and enquiries in 2012 have been steady. The village of Porto Cervo continues to be the main focus of interest for international buyers.