A study published by research institute Scenari Immobiliari (Real Estate Scenarios) shows property sales to foreigners living in Italy fell by around 50% since the start of the pandemic.
The Scenari Immobiliari (Real Estate Scenarios) study found housing sales to non-Italian residents are projected to fall from 106,000 in the two-year period spanning 2018-2019, to 56,000 in 2020-2021.
Behind the declines are uncertain employment prospects and a credit squeeze on mortgages, Scenari Immobiliari’s president Mario Breglia told the financial daily Il Sole 24 Ore.
Breglia also attributed the downturn to the inability of prospective buyers to visit properties in person when Italy went into strict lockdown.
Focus on foreign residents in Italy
The Scenari Immobiliari study focuses specifically on foreign buyers already living in Italy. The majority take out a mortgage, and a stipulation of that is to demonstrate long-term stable employment. The pandemic has made that state of affairs precarious for many.
North Italy most popular
Northern Italy is the most desired location, accounting for 77% of all purchases by foreign buyers, according to the study.
Central Italy makes up 19% of the market, with the south and all islands only accounting for 4% of sales.
Forecast for Italy’s property market in 2021
In a stark contrast to its foreign housing market, Italy’s housing sector as a whole thrived during 2020. Prices rose more than they had in the past decade after a brief Covid-19-induced slump at the start of the year. This according to provisional figures from the national statistics office Istat.
The south and Italy’s islands saw the highest level of increased interest from buyers. Prices rose 3% in those areas in the first quarter of 2020 compared to the same period a year before.
The likely reason for that trend is the increase in remote working. The attractiveness of better weather and cheaper prices will have seen buyers look to the south. In addition, southerners may have returned to their home towns.
According to current projections, sales will return to pre-pandemic levels in 2022. Villages selling off properties for €1 will be pleased with that prediction.