Top end property prices in Tuscany and Umbria are holding their values.
Few areas of Italy are more popular with foreign buyers than Tuscany and Umbria. Silvery olive groves, vineyard-encrusted hills and ancient stone-built hamlets have a perennial charm that never fails to entice prospective second homers. So how are the markets in these two areas faring in these turbulent times?According to the research office of Italian estate agents Gabetti, Florence has seen a small decline in property prices—but not at the top end and nearly a third of Florentine buyers are now prepared to spend more than €500,000 on their home (up from 25.6% in January 2008).
As for the countryside, Chianti villages remain expensive. Quality homes in Greve cost in the region of €4000 per sqmtPrime properties in particular are faring better than the rest, especially in the historic city centre, where renovated homes in ancient palazzos cost €5,000-6,000 per square metre, in Piazza del Campo, the sky is the limit.
At the same time, buyers are snubbing the modern new builds on the outskirts of town, despite average discounts of 15% on the asking price. “The town has seen too much building activity, particularly developments of 3-4 level buildings in modern style with small-sized homes, whereas Lucca residents tend to prefer bigger rooms and a rustic Tuscan style,” the Gabetti report explains.
So do the foreigners. Even though overseas demand is reducing, states Gabetti, affluent Dutch, British and American buyers continue to flock to Tuscany.
Over the border in Umbria, prices went down by 1.7% in Perugia—but the slowdown is chiefly linked to small-size investment properties, where a good flat costs an average of €3,500 per square metre.
Elsewhere in the region, places that draw plenty of foreign buyers, like Gubbio, are seeing prices in the range of €2400 to €3,000 per square metre for good quality homes that are either new or ready to move in.
These statistics, however, need to be taken with a pinch of salt, warns Roger Coombes of Cluttons Italy, “There are really two distinct market sectors in this part of Italy. The first consists of town and suburban apartments and terrace houses which, at the risk of oversimplifying, we can call the local market. This is the market covered by the available sources of statistical data on property sales,” he says. “The other or ‘foreigners’ market is fuelled by the demand for traditional farmhouses or historic town houses, restored or for restoration, mainly from foreign buyers who are driven by the wish to buy into a somewhat romantically perceived idea of the Italian way of life, over and above just wanting to make a sound long term investment.”
The latter market, he explains, only started in the 1980s “when it was possible to acquire run down or ruined properties in picturesque locations at very attractive prices.
“That phase has run its course: Italian farmers now have a very shrewd idea of the value foreign buyers perceive in a ruin, and the supply of such ruins has run relatively dry,” he says. “The market has matured, some properties restored to a high standard 10 to 20 years ago are coming up for sale as their owners adapt to changing personal circumstances, and buyers generally are very well informed about the types and quality of properties to be found in the various regions of Italy.”
While the number of transactions in the ‘foreigners’ market is too small to draw some meaningful statistical conclusions, empirical observation suggests that “Typical UK buyers in the price bracket up to €500,000 would be a middle-aged couple who re-mortgage their UK home to buy a holiday home abroad. With the current decline in the UK housing market, many such people are now hesitating before making a buying decision.” Coombes “can say with some certainty that buyers who have decided in principle that they wish to acquire property in Tuscany or Umbria remain strongly aware of the underlying value of property in this unique region of Europe.”