New economic measure allows property to be sold in bonds

Italy's economy ministry will be able to sell state real estate assets in exchange for government bonds to clarify and expedite the euro zone's third-largest economy out of a debt crisis.

According to Dowjones newswires reports, the government’s growth plan which is due to be approved as part of the 2012 budget bill is set to offer some respite to Italian banks, whose large holdings of Italian government bonds has caused them to suffer from regulatory and market concerns. The maxi-amendment presented by Economy Minister Giulio Tremonti to the Senate Budget Committee stated that the ministry will be authorized to sell public property to special-purpose vehicles or other buyers.

A senior government official said that the amendment allows the ministry "to accept government bonds as compensation for the sales" which will create an opportunity for Italian banks.

As a key regulatory measure for solvency, Italian banks hold Buoni Del Tesoro Poliennali, or BTPs, equivalent to more than 150% of their core Tier 1 capital. New European rules need banks to cut rate the market value of their BTPs and at a time when liquidity in Italian financial markets is scarce this makes them to raise more than EUR14 billion in fresh capitals. In exchange for property, Banks could offer some of their BTPs back to the government which is likely to be leased back by the government. Banks could securitize those properties into covered bonds eligible as collateral at the European Central Bank, backed by the cash flow from the lease contracts. In the past efforts to sell some real-estate assets have struggled for lack of bidders, however the new measure also solves a problem for the Italian Treasury.

Meanwhile, President Giorgio Napolitano's called for "immediate efforts" to put Italy's public finances in a safer condition. Yields on Italian government bond yields surged to record highs with the 10-year yield now at 7.35% and even two-year bonds now yielding 6.5 percentage points more than similar German paper. There is also increasing calls for the government to carry out a massive funding drive through swift privatizations or a one-time wealth tax, to tap Italy's substantial household wealth to reduce the country's huge debt pile and shore up its economy.

Liguria Homes- the perfect Italian getaway

Liguria may be about to rise up as a property hotspot for those investing in Italy. The increased interest in the region may signal a trend of overseas investors moving away from major cities and preferring to purchase homes in smaller villages, it has been suggested.

According to entrepreneur Martin De Rosa, Demand for homes in Liguria, Umbria and Tuscany is reaching an all time high among foreign buyers. The competition for Ligurian properties is increasing prices up, and luring homeowners who will spare no expense in finding the perfect Italian getaway. He stated that Germans spend an average of 300,000 Euros and Russian buyers are willing to put down over 900,000 for the perfect Ligurian home. British property buyers in Italy have become increasingly involved in Liguria in the past couple of years as76% of British buyers look at buildings in the 300,000 to 500,000 euro price range.

The Italymag.com website has reported that the thriving market is attracting buyers who are willing to pay up to 17,000 Euro a square meter for properties in Ligurian towns like Santa Margherita Ligure. A recent study of the number of adverts for properties by Italymag.co.uk found that there were more for Liguria than any other part of the country, Country Life reported.

In addition to this, the Italian region offers other outstanding attractions and achieved a record number of Blue Flag beaches in 2011. Blue flags were awarded to Camporosso, Bordighera ,  Albissola Marina, Albisola Superiore, Ligure, Loano, Noli, Spotorno, Savona-Fornaci, Bergeggi, Celle Ligure, Finale and Varazze.  Therefore, it could be an ideal market for buy-to-let investors who wish to purchase a property in a rapidly expanding market.

Gastronomic destinations in Italy boost property investment

Italy is an outstanding place to visit for its food, festivals and cultural attractions. The top European destination for food and wine was Florence in Italy, with Paris second, Rome third and Sorrento in Italy fourth.

According to a recent poll from Tripadvisor, Italy dominated the list with Siena in sixth place and Bologna seventh. The Spanish cities of San Sebastian were (eighth) and Barcelona (ninth) respectively, London failed to make the European top 10,   with Edinburgh 10th, according to a poll of world travelers. Italy is now well and truly establishing its place on Europe’s gastro tourism map which is good news for property investors as this means more travelers will be visiting the country

Tripadvisor spokeswoman Emma Shaw said: “With tough competition from destinations renowned for their culinary expertise, these awards recognize Europe’s best food and wine destinations according to millions of Tripadvisor travelers”.

Meanwhile, a new survey by Immobiliare.it confirmed that when Italians go house shopping there is one room that matters more than the rest: the kitchen. The website based its results on the 6 million queries it receives every month from people searching for new homes which shows the culinary interest in the country. Almost one in six Italian real estate shoppers wants a place for the family chef that includes an island. 14% even indicate the brand of kitchen that they are in the hunt for.

As la cucina matters most, Italian home buyers are even willing to adjust on other features like closets and balconies in support of a better place to cook and gather.

Sardinia and Cortina are home to the most expensive properties

Italy may seem like the preserve of the rich and famous however with stable property prices the country has become more accessible.

According to the latest Knight Frank Prime International Residential Index, some areas of Italy are home to the most expensive properties in the world.  In the index’s list of the world’s top 30 non-city property hotspots, the country boasts five entries with the most expensive spot was Sardinia's Porto Cerva, a marina on the Emerald Coast.  Buyers could not approach Sardinia’s Waterfront property for less than £44 million and it is not unheard of for it to fetch £88 million.

International property company Savills stated that home values in Porto Cervo's Via Romazzino are at least $42,000 (£26,000) per square meter.  Jelena Cvjetkovic, property analyst in Savills said that the holiday homes of many of Italy's wealthiest people and many Russian billionaires are located on this street. The resort of Cortina is also popular with wealthy investors and property values are £13,388 per square meter, far higher than similar areas of France.

The index also stated Lake Como which may continue to be regarded as glamorous however buying a luxury overseas property there is not nearly as expensive as you may think.  New build properties in the area are making ownership affordable and can be purchased for under €250,000 (£219,275).  The average real estate prices in the region are £8,490 per square ft. The Independent has stated that prices in the Lake Como area remained stable during the recent global financial crisis.

Meanwhile, James Price, head of international residential development at Knight Frank, commented:  "Lake Como has fared much in the same way as other prime European markets; the best-located properties remain desired and largely owners can hold for prices as they are not in need of rapid sales”.

Investors showing more interest in Italian beach properties

Owners of a holiday home in Italy have been encouraged to consider entering the rental market as Italy remains a popular holiday destination.

The Italian tourist board stated that holidaymakers will be able to enjoy the "perfect" trip if they choose to visit Italy. Stefania Gatta, press and communications officer at the Italian Tourist Board, recommended visitors took advantage of the country's culture and the country offers everything to make a holiday perfect.

He commented: “it is not too far, served by many airlines at competitive prices, it offers beautiful scenery, art cities, fashion, good food and reasonably good weather."    

Every year an increasing number of countries and seaside resorts submit their applications to gain Blue flag award. The Blue Flag is an award given by the FEE (Foundation for Environmental Education ), which assesses the best beaches and marinas through strict parameters such as Visitor safety , water quality, environmental management,  services provided close to or within the beach area. Italy is a top player in this competition with the number of blue flags increasing every year with 233 blue flags assigned in 2011. The Italian province with the highest number of blue flags is Liguria with 17 beaches awarded, followed by Tuscany and Marche with 16 each and Abruzzo with 14 and Puglia with 8.  

The news could lead to an increase in the number of individuals looking for Italian beach properties. Property developers believe that the Blue Flags will be welcome news for home owners with properties located close to the various beaches and this could help retain a higher value over time as well as see greater rental appeal.

Indians are increasingly purchasing properties in Italy

The  Italian property market is experiencing an influx of new buyers from India who are taking advantage of the country's low house prices, it has been claimed.

Gulzar Malhotra, Vice-president of credit risk management at Deutsche Bank told Business Standard that locations such as Sicily and Tuscany are proving popular among Indian investors.

He explained that lower Prices in the country mean that individuals are paying a fraction of the cost for property compared with 18 months ago and as such the European destination has become more affordable for new potential buyers seeking second homes or investment opportunities. DTZ published its Money into Property Europe 2011 report in May, which revealed that transaction volumes to Europe has increased by 64 per cent in 2010 compared with the previous year. The organization also predicted that this is expected to rise by a further 20 per cent by the end of 2011. However, the Reserve Bank of India has restricted the amount that can be spent on foreign property annually to $200,000 (£125,517) per person.

Linda Travella of property firm Casa travella explained that there has been a significant rise in the number of individuals purchasing property right at the bottom of the marketplace.

Besides, these traditional investors, a new breed of property buyers have emerged, capitalizing on the ability to invest in homes which before would have been high-priced.

Meanwhile, the Knight Frank Prime International Residential Index has noted that several popular cities in Italy saw property values fall throughout 2010. The firm revealed that Florence, Sardinia, Cortina, Tuscany and Venice, all saw prices drop by five per cent during 2010, with Rome being the only Italian destination to register an increase last year.

Dramatic rise in investor appetite for Italian distressed assets

Investors looking for a good deal on distressed property available in Italy should be able to find an asset at a reasonable price.

The recent survey from Royal Institution of Chartered Surveyors (Rics) Global Distressed Property Monitor revealed that demand has increased in the country during the Q2 of the year, compared to the previous three-month period. Foreclosures are predicted to rise between July and September to reach a net balance of over 50 per cent as supply of such assets is still expected to exceed demand in Italy.

Simon Rubinsohn, chief economist at Rics had stated that the remarkable rise in investor interest for distressed assets may be reflecting a measure of confidence in the outlook for the real estate sector despite the volatile economic context.

Meanwhile, Charles Weston Baker, Director of the international department at Savills told that the National buyers can now find houses in the country for 20 to 30 per cent less than their value in 2007 as severe planning laws in Italy have resulted in less oversupply than in other Mediterranean nations, such as Spain, however the weak market has still pulled prices lower.

Overseas Property Professional (OPP) has cited the Italy's land registry,  Agenzia Del Territerio reports and stated that  property sales in Italy only fell by 0.4 per cent year-on-year - compared to the 18.6 per cent during the first quarter of 2009.

Travel and property expert Linda Travella commented:  “the decision of many expats to sell their property at lower prices was helping the market. I'm pleased that we're seeing reductions because clients were coming over expecting price drops and they weren't getting them. There are now properties selling that people couldn't afford before."

Western Sicily among the hottest property destinations for 2011

Sicily property market is starting to overcome its negative image, thanks largely to tourism, which buoyed by the introduction of a number of low-cost airlines, is really starting to take off and could be among the hottest holiday destinations for 2011.

According to Holiday operator Travelzest, with flights to property in Italy's western Sicilian regions cheaper than those to the east of the island, the area gains its place on the shortlist. This in turn is increasing demand for property in Sicily to both buy and rent, which has led to an increase in the supply of new homes.

The west of Sicily is particularly influenced by Moorish culture from the southern Mediterranean coastline. Due to this, styles from North Africa stand alongside traditional 'baglio', thick-walled farmhouses complete with arches and courtyards unique to western Sicily.

The company said that this part of Sicily offers a distinctively different experience from that of the east and is less crowded.

Giuseppe Giliberti, director of Hamptons International said that Sicily property prices have sharply risen in the last few years. This has caused a strong increase in new builds and now the market of holiday homes is quite abundant but the quality is not always at a high standard. Growing tourism levels are being supported by a range of attractions, including an array of beaches, great year-round weather, attractive scenery, skiing on Mount Etna and two golf courses with more in the planning stage.
Giliberti commented: "Over the next couple of years a number of golf courses will open and this is expected to add tremendous appeal."

Investors are urged to get rid of Stereotypical view of Italian real estate

Property investors who regard the Italian property market as unsafe and dogged by bureaucracy may be missing a trick, it has been claimed.

Analysing the country's property market, property wire has highlighted a number of positive aspects, often overlooked by buyers. The portal stated that the critical view on Italy from outside is often laced with references to weak rental growth, below average building quality, high tax rates, inefficient bureaucracy and unsatisfactory market transparency.

The website cited according the latest property market analysis from Henderson Global Investors which indicates that there is more to Italy than meets the eye and concludes that international players should look for more in the country’s property market.

Furthermore, public and private debt remains low and there is a real shortage of distressed property on the market, which is keeping values reasonably stable.

However, Stefan Wundrak, European research manager at Henderson Global Investors said that views of the Italian property market can often vary depending on the point of view as foreign players mainly see risks, whereas locals praise the achievement of relative market stability

Meanwhile, the Italian property market is experiencing an influx of new buyers who are taking advantage of the country's low house prices. Prices in the country mean that individuals are paying a fraction of the cost for property compared with 18 months ago and as such the European destination has become more affordable for new potential buyers.

Linda Travella of Casa travella an expert on Italian property explained that there has been a significant rise in the number of individuals purchasing property right at the bottom of the marketplace.

Buyers are urged to research before heading to property in Italy

It makes sense to analyze the situation and determine that buying a property in Italy has a huge potential to improve the quality of life!

Mike Whiting, managing editor of airport parking booking site Holiday Extras said that many buyers set themselves up for a rocky road and some ultimately fail to realize their dreams, rather than taking the time to understand what is truly involved in buying a property in Italy. He said many people do not adequately research the background of their destination.

He commented: "It seems that travelers are willing to speak out when it comes to service – whether that is quality of food, accommodation or even the quality of tours and excursions."

He suggested that one way to avoid the issue could be to purchase property in Italy ensuring a level of familiarity and a standard of accommodation that will not drop with time. Travelers may find “one place in Italy can be dirt cheap and another place can be really expensive", however, that some research ahead of departure can identify which areas are among the cheaper. In case anything prevents the holidaymaker from making the most of these lower-cost regions, travel experts also recommends having a back-up source of funding.

Commenting on the country, Property Abroad director Les Calvert said that the changing international property market situation has been advantageous for Italy and the country is now benefiting from not being a market that has traditionally boomed. He commented that the credit crunch has "exposed" some countries, however in Italy things are generally stable within the country during volatile times has made it even more attractive to lifestyle buyers.