Why luxury real estate investments in Italy are so attractive
Berkshire Hathaway presented an analysis of the real estate market in Europe. Special attention was paid to Italy, where even during the pandemic investment in luxury real estate remained at a high level. However, over the past year, the segment has demonstrated active development. Experts point out that the interest in the premium sector of housing has grown considerably. The main reason for this dynamics is the pandemic and the changes it brought. There are changes in the needs of buyers: after restrictions, people want more freedom and space. Investors picked up on the changes in time and focused their attention on the luxury real estate sector.
69% of the surveyed experts agreed that Italian premium housing demonstrates high competitiveness. Luxury properties in this country are in high demand compared to other investment-attractive markets. Last year, property in Italy bought a lot of citizens from Britain, the U.S., and European countries.
Despite the active development, the local luxury housing market has its own problems. First and foremost it concerns the limited supply. Analysts point out that in the segment there is an acute shortage of properties that would meet all the requirements of customers. This is especially true for foreigners who often can not find the right option for themselves.
At the beginning of this year, analysts published an optimistic development forecast for the Italian market. However, the geopolitical conflict has made adjustments, and experts were forced to lower expectations. The specifics of the luxury housing segment is that its development depends primarily on foreign investment. A significant share of investments was made by buyers from the country which caused geopolitical tensions in the world. And as a consequence, investments here have decreased.
Another factor that is slowing down the growth rate of the luxury housing market is measures to curb the growth of inflation. Italy, like other EU countries, has raised interest rates, which puts pressure on the real estate sector and demand here. However, experts do not believe that this factor will have a significant impact on the development of luxury housing, as the market has already shown its resilience, including during the pandemic.
According to the updated forecast of the segment, in 2022-2023 analysts expect a slowdown in the dynamics. In this case, the sector of elite real estate in Italy will not feel any losses. Investors will still be interested in local facilities, and here there is great merit in the government. The State offers a convenient program called “Golden Visa”. In addition, the Italian authorities are doing everything possible to slow the growth of fuel costs and promote an environmental strategy. These and other measures help to maintain and increase the investment appeal of the local market.