Predictions from property market experts in Italy in the midst of the coronavirus pandemic.
The year 2020 in Italy will go down in history as the year of social distancing and staying at home, something which has had and will continue to have a lasting effect on the property market in Italy. Having already seen changes in preferences when it comes to buying property, with buyers searching for more space both inside and outside, what other changes will 2021 bring in the property market? Will house prices drop in Italy in 2021? And is 2021 a good time to buy property in Italy? These are just some of the questions that may spring to mind if you're thinking of moving to Italy in 2021, and while the uncertainty of the pandemic, as well as other uncertainties such as Brexit, may be putting plans on hold, we're here with everything you need to know about house price trends in Italy in 2021.
Price drops at the beginning of 2021 in Italy
Looking at the most recent data in the real estate sector in Italy, the month of January 2021 saw price drops for pre-owned or used properties. House prices saw a decrease of 0.6% compared to the previous month, settling at an average value of 1,734 euros per m2. This is according a price index drawn up by idealista's research department, where the experts conclude that after the drop in transactions in 2020, Italy is now seeing the first effects of the coronavirus on house prices across the country.
The index observes a market split in January 2021 which could give us an idea of how house prices in Italy may evolve in 2021. Around half of the regions in Italy have experienced price increases, while the other half seen decreases. The areas of Italy that saw the greatest decrease in prices were Lazio (-2.4%) and Lombardy (-1.2%), followed by Apulia (-0.9%) and Veneto (-0.7%). Liguria, Emilia-Romagna and Campania saw very minor drops of 0.3% and Basilicata and Piedmont 0.2%.
On the other hand, the regions with the highest increase in house prices are Valle d'Aosta (2.9%), Molise (1.5%), Marche (1.2%) and Friuli-Venezia Giulia (1.1%). Umbria and Trentino South Tyrol both saw increases of 0.5%, followed by Sardinia (0.4%), Tuscany (0.3%), Abruzzo and Calabria (0.2% in both regions).
The importance of the COVID-19 vaccine
In its latest report, Nomisma, a research and consulting company in Italy, also stressed that the number of sales in the coming year in Italy, and in turn house prices in Italy will be heavily influenced by the timeliness and effectiveness with which the vaccine will be made available. This is a factor that is particularly relevant for inernational buyers and expats, as those interested in buying property in Italy may not have enough confidence to do so this year if the vaccine isn't rolled out soon.
This means that the picture in many areas of Italy, especially those areas that attract buyers from abroad, is highly uncertain. If the picture should remain uncertain, as is Nomisma's forecast for next year, the number of property transactions in Italy will be less than half a million: 495 thousand units in the most optimistic hypothesis, something which will also undoubtedly have an effect on property prices in Italy.
Price rises for new homes with open spaces
Anyone planning to buy property in Italy in 2021 will more than likely be looking for spaces adapted to the new needs that arose during the pandemic period: open and spacious environments to ensure interpersonal distances, outdoor areas, rooms for smartworking, etc. With this in mind, real estate experts state that properties that meet this criteria, especially new-build properties in Italy, will experience the least price variation and prices may even rise.
2021 forecast for the Italian property market
“Italy’s real estate market has withstood the impact of the pandemic well, under the pressure of changed housing needs triggered by the crisis, and with interest rates at historic lows,” explained Vincenzo De Tommaso, Head of the Studies Office at idealista. With this in mind, and according to Statista, the market and consumer data company, house prices in the Mediterranean country will continue to decrease by 2.6%, or 4% in the worst case scenario, a situation which is much more positive than other EU countries. The same source believes house price development in Italy will be closely connected to how the economy in Italy responds to COVID-19 measures in 2021.