Italy house prices hold their value in Euro crisis

Source: The Move Channel

Say what you want about Berlusconi’s recreational activities, but as his fellow southern European economies flounder, the Italian leader appears to have kept home affairs in order. According to new Bank of Italy figures, housing prices in Italy’s 13 major cities remained largely unchanged as 2010 drew to a close, with some cities even achieving price growth.

As a desirable holiday destination with few restrictions to foreign investment, Italy experienced a similar property boom to Spain and Portugal over the years preceding the financial crisis, with prices rising 70% from 1998-2008 according to the Bank of Italy. The difference is that these properties haven’t lost their value – the national house price index fell a miniscule 0.3% between 2009 and 2010, with prices even increasing in the cities of Cagliari, Catania and Genoa.

This may be because the country’s investment laws, unlike those of some of its neighbours, are decidedly in favour of the property buyer. Italian banks have a solid guarantee on deposit for off-the-plan developments, while properties resold after five years are exempt from capital gains tax.

With a secure framework for foreign investment and a steady rate of growth, local agents are confident the market will see more good things in 2011. 61% of agents surveyed by the Bank of Italy expect the overall housing market to improve over the next two years, while 26% expect it to hold steady. Compare that to the shaky 37% of respondents who think UK property prices might rise in a similar survey conducted in Britain recently, and Italy looks like an extremely stable prospect for investment on the European market.

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