12 Truths About the Italian Housing Market Laid Bare
Despite the articles of doom and gloom that you can read about the Italian economy, the housing market, especially in major cities like Milan, Florence, and Rome, continue to hold their own, therefore, the property market remains very much in favor of the landlord or seller. This means there is very little room for negotiation on the rent or price, particularly when it comes to very sought-after properties.
When I sit down for a strategy session with a client who is about to relocate to Italy, I get extremely granular in explaining certain aspects of the Italian housing market, so as to avoid any misconceived perceptions, thus allowing my team and I to give them the best customer experience possible, regarding their home search.
Some of the points that I cover include the following twelve:
1. Landlords in major markets really have the pick of the litter when it comes to tenants, especially if they own a property for which there are a lot of requests, which is often the case in cities like Milan, Rome, and Florence.
2. When you submit a lease proposal, which is often the precursor to the lease contract, there is no guarantee that this will secure the property. Landlords often gather several lease proposals and will more than likely choose the one that is the most convenient for them. One can expect to wait 5–7 working days for an answer from the landlord.
3. When one submits a lease proposal, a month’s rent will normally be given as well, to show good faith to the landlord. If the lease proposal is accepted, this month’s rent will be taken into consideration as the first month’s rent or will be used as part of the security deposit.
4. The trend lately, again in the major markets, is for landlords to request trimonthly rental payments paid in advance.
5. Given the demand outstrips supply very often in 1st tier cities, landlords for the most part, are not very willing to negotiate on the rent, or to consider other requests that the tenant may have. Considering this — it will behoove one most of the time not to include excessive requests in the lease proposal.
6. If one’s home search is being conducted by a Destination Service Provider, and considering the competition for properties in certain markets, it is a good idea to discuss with them their policy for providing the most complete and impartial home search possible, so one can really get to see what is on the market.
7. To avoid issues, it is wise to only work with professionals who are licensed realtors. It is advisable not to work with “middlemen” who do not have a realtor’s license to operate in Italy. The realtor’s license number will normally be in their e-mail signature or listed on their invoice or website.
8. Deposit — all leases require a security deposit that normally is 2- or 3-months’ rent. This only covers dilapidations and not unpaid rent.
9. Realtors’ commission is normally one or two months’ rent or 10–18% of the annual rent. This commission is not normally negotiable and can vary from region to region.
10. Exclusivity is almost unheard of in Italy. Therefore, the same property may be listed with multiple realtors.
11. When buying a property in Italy, it is best to hire professionals to assist you in the process, so that due diligence can be carried out properly. These professionals can include a realtor, surveyor, and notary.
12. Obtaining a mortgage or loan in Italy as a foreigner can be challenging, but it’s not impossible. The easiest way to buy a property in Italy is to bring your own money.
Are There Really €1 Properties in Italy?
Due to the many articles that have been published around the world, I have received quite a few inquiries asking me if it is possible to buy a house in Italy for €1 — the answer is yes due to special programs available in certain towns.
However, as the saying goes that there are no free lunches, so there are a few things to consider before buying one:
- These properties are normally located in remote areas.
- They will usually need to be renovated considerably and this must be completed by a certain date.
- Resale value may not increase much despite the investment in bringing the property up to standard.
- The Town Hall has a list of terms and conditions that potential buyers must agree to — these should be checked and read carefully.
Other aspects that one should consider before buying a €1 property include:
- Due to their location employment opportunities may be non-existent.
- Internet connection could be an issue, though satellite options may be viable.
- Medical facilities may not be in easy reach of the town’s location.
- Purchasing one of these properties as a Non-EU citizen, does not give you any special immigration or residency status, in any way, shape, or form.
- Before buying one of these properties, it is highly advisable to come on a look / see trip and to engage the services of local experts such as a notary, accountant, and surveyor to avoid any unpleasant surprises down the line.
If you would like to know more about these €1 home programs, you should contact the Town Hall directly in the towns that are offering these properties for sale. A list of the towns sending €1 homes can be found through a simple Google search.
If you require any case-specific assistance, please feel free to contact me www.damienofarrell.com
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