Is it a good time to buy property in Italy? (Nov 2011)
At the moment the news is flooded with everything bad about the Italian economy. I'm no economist but I'm more than a little sceptical, and suspicious.
The USA tell Europe to sort itself out and Britain tells the Eurozone to sort itself out and France and Germany take to moral high ground and say the same, each one hiding a pile of trouble caused by mismanagement and unmonitored banking for the last 10 years… It's very easy to distract people from their own governments mistakes by pointing the finger of blame at someone else.
Now here's a few reasons why I'm confident Italy is now a great place to buy property:
1. It's a big economy despite a lot of debt. It's a rich country that doesn't believe happiness can only be achieved by being in big personal debt. I really think this is the main thing that will save it. I can't see how other countries, with its people loaded down with credit card bills and their properties in negative equity, are going to get through. That's why I think a lot of what is now being blamed on Italy is a bit of a smoke screen. Keep in mind too, one very important factor - Tax evasion is a national sport. Even Silvio Berlusconi admitted it, that a lot of business is done in cash - in black. It's a big economy and a rich country. Italy gets more tax money than it can spend. There's plenty of money here.
2. Italians don't move much. If you're from the USA or UK you probably move and always have moved about every 7 years. We like changing houses - Italians don't. Family homes (the sort foreigners don't buy) are decreasing in value a little but holiday homes are not, not overall. There will always be foreigners buying here as it's a great place to live. House prices have dropped a little but they wont drop more, and once things calm down they will increase again.
3. Some people are desperate to sell and as the market isn't very lively they will negotiate. We have some real bargains. For example, pensioners want to move to smaller places. One typical example - a retired couple have a big house in Asti and want buy two apartments - one in Asti and one by the sea. They want to do it as soon as possible so they are willing to negotiate a good deal for the buyer.
4. OK, so you buy a property and the value drops a little, it could happen. What are you 'stuck with'? A beautiful house in a beautiful area of the world. Put the money in shares and if they go belly up you get a piece of paper.
5. Tourism in Piedmont Italy is increasing 10% year on year. If you can no longer afford your holiday home, rent it out for €2,000 a week. Your mortgage is well covered and you can still take a holiday here.
I think we have to look beyond the negative and bias news reports and grab a bargain. The smart people are. We've just negotiated a great price for a wonderful Langhe property. The owners needed to sell and the buyers put their money on the table - they can't lose. Whatever happens, it's still a great place to be and we have no intention of quitting. If News channels, like the BBC, stop trying to make negative predications and instead just stick to reporting 'news' it will be fine. Sadly, in my mind, there's very little news being reported and a lot of scape-goating going on.
