Foreign investors crazy for Italian real estate
Rich countries buy luxury assets, foreign people Italians second home
This has been a crazy semester for Italian real estate, with foreign investors arguing that "Italy's territory is one of the most important natural resources of the country that can support economic growth in the future".
The most recent news is related to Qatar Holding and property group Hines taking a stake in a high-end real estate development in Milan, the Porta Nuova complex (2 billion Euro value), which is part of a massive development plan Milan is supporting in preparation for 2015 World Expo. Porta Nuova is a mixed-use real estate building (the complex includes a series of luxury apartments and a 90,000 square meter park), the larger ever built in a European city center. It is closed to Corso Como, a renowned district for dining and shopping.
It is not the first time that Quatar is investing on Italian assets: it has already bought the couture house Valentino and a luxury resort in Sardinia, and like Qatari, Chinese investors are also increasingly trying to buy Italian luxury assets.
However, Italy today is not attractive for its luxury goods only. The economic slowdown, higher property taxes, maintenance costs and a stagnating market have significantly slowed down residential sales, whose amount dropped nearly 26 percent in 2012. As a consequence, many Italians have started selling their second home, and their sales to foreign buyers rose 14 percent last year, to 2.1 billion Euro.
How much do they cost? Villa starts from 4 million Euro and their price can even rise to 10 million Euro when they are big. However, house hunters say that it is much easier to sign a deal in the midrange market, which means bargaining on houses whose price swings from 750,000 to 1.5 million Euro. These houses are easier to sell for two reasons: a lower price, which is usually associated to limited refurbishing costs. On the contrary, old villas usually need to go through massive and expensive renovation before becoming fit for habitation.