It finally may be time to buy a slice of La Dolce Vita as house prices in Italy’s top markets slid last year and could be finally bottoming out.
In its first in-depth health check of Italy’s prime housing markets, released Tuesday, real estate consultancy Knight Frank found that average prices declined by 5.5% in 2016.
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However, the overall figure masked a wide disparity among Italy’s top 15 home buying markets, with more than 14 percentage points separating the strongest and weakest performing areas.
At the top of the pile was glamorous Lake Como, where actor George Clooney famously owns a mansion. The posh area saw prices rise 1.2% year-on-year in 2016, with buyers attracted by its proximity to both Milan and the Swiss border.
The major Italian cities–Rome, Milan, Florence and Venice– also sit within the top half of the rankings and have seen their rate of decline slow significantly in the last two years.
At the other end of the scale was Forte dei Marmi, located in the province of Lucca, which recorded the weakest growth overall, with prices slipping 13% in the year to December.
"A niche market, the town saw a surge in Russian buyers prior to the financial crisis but high stock levels and softening demand has seen values fall," said Kate Everett-Allen, a partner at Knight Frank.
According to Knight Frank, Italy’s economy has endured a rocky ride since 2008, but its prime property market is at, or close to, the bottom of its cycle, sparking the interest of euro-backed buyers.
Although British, pound-backed buyers are finding Italy and the wider eurozone more expensive, euro buyers are hunting for, and in some cases finding, good value.
U.S. buyers, meanwhile, have yet to pick up Italian real estate in large numbers, despite the favorable dollar-to-euro exchange rate, but Knight Frank expects inquiries to strengthen during 2017.
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"2016 proved a turbulent year, but that’s nothing unusual in Italian politics, and although both the domestic and global economy are facing their own respective headwinds, we expect prices will stay largely static; we don’t see immediate rises or substantial declines on the horizon," Ms. Everett-Allen said.