EASYROME

The prices of property in Italy saw a decrease in the second half of 2008 according to the estate agent group Tecnocasa.
This is caused, says the report, by a bigger property offer on the market, a more careful demand and a longer sale time.
The Italian property market, in fact, has slowed down also because the potential buyers have lengthen their decision time, pushed by the news about the Italian economy and by the unsureness of their budget availability. Furthermore, the tightening of credit distribution rules adopted by the Italian banks, despite they haven't been hit as much hard as in all the other countries by the credit crunch, has created great difficulties for those buyers who don't have a big cash availability and need a bigger mortgage. This lack of cash flow has caused tougher negotiations between buyers and vendors, leading the deals to be closed at a lower sale price.

The property prices have seen a stronger decrease in all the regional capitals (-3.9%) followed by the biggest city's outskirts (-3.8%) and eventually in the biggest cities (-3.6%). Within the biggest cities the major decrease has been registered by Palermo (-4.9%), Bologna (-4.6%) and Naples (-4.4%). Rome has registered a decrease of 3.6% and Milan of 2.4%.
As for the biggest city's outskirts the major price decrease has been registered by the outskirt of Bologna (-5.4%), followed by Rome's outskirt (-4.6%) and the outskirt of Naples (-4.4%).

To sum up the data, the major price decrease has been registered in the main cities of the South (-4%), followed by the ones in the North (-3.9%) and then in Central Italy (-3.7%)

But the second half of 2008 has recorded also a coming back of the investments in property. Ever more investors are running away from unsure financial investments and are heading towards property investments, confirming the property market as one of the most secure investments and it as the favorite by Italians.

The expert's feeling is that in the first months of 2009 there has been an increase in the property demand, pushed not only by lower interest rates but also by the awareness that the property market has undertaken a new direction and that the property price decrease offers great investment opportunities.

In the second half of 2008 the main key used to turn all the negotiations into sales was, once again, the price. Nearly the totality of the potential buyers pay ever more attention to the property quality and is ever more focused to get a good value for money. This has determined a stronger decrease of prices in resale properties than in restored and new properties. Medium and lower end properties have registered the strongest price decrease, whereas prestigious properties have better hold their prices, although also for this range of property the buyers are more careful, especially if the property doesn?t sutisfy all the buyer?s needs. This means that the caution before buying has hit all the property ranges.

The second half of 2008 has seen the upswing of the property demand that in the previous semesters had decreased. The post summer negative trend of financial markets has set a return of interest in property investments that is enduring also in the first months of 2009. The investors have diverted their capitals towards properties that could provide an income, such as properties to be rented as holiday homes.

The analysis of the demand in January 09 show that in the Italian biggest cities the more requested property type was a two bedroom property (house or apartment) chosen for the 35.7% of the times, followed by one bedroom property (28,6%) and three bedroom property. The average price ranges of the property request is between ?170,000 and ?249,000 (24%) followed by the price range between ?250,000 and ?349,000 (21,6%). The main property type offered by the market is the two bedroom property (33.9%), followed by one bedroom property and three bedroom property (22.8%).

It is difficult to see what will happen during the next months, much will depend on the trend of the Italian economy and on the bank?s behavior. The experts predict that for the upcoming months we will see a further decrease in the sale?s volume and in the property prices. Especially the decrease in property prices along with cuts in the interest rates have given confidence in the potential buyers who start to see that the period offers good opportunities to buy a property in Italy.

Simone Rossi works for the Italian property portal http://www.gate-away.com. Gate-away.com is the leading property portal specialized in the promotion of Italian homes for sale to foreign investors.

Article Source: Italy Sees a Decrease in Property Prices