Read news from:
Austria
SHARE
COPY LINK

PROPERTY

Italian mortgage rates fall for first time in two years

Mortgage interest rates fell in December for the first time after 24 months of increases, Italian banking association ABI said on Tuesday.

Published: 16 January 2024 15:07 CET
Italian mortgage rates fall for first time in two years
Mortgage rates in Italy are seeing a downturn for the first time in two years, data showed on Tuesday. Photo by Babak Habibi on Unsplash

ABI said the average interest rate applied to new mortgages at the end of 2023 was 4.42 percent, down from 4.5 in November, reported financial newspaper Il Sole 24 Ore.

The small drop marked the end of two years of consecutive monthly rises to the average rate, giving some hope to prospective home buyers facing a steady rise in the cost of borrowing.

READ ALSO: What to expect from Italy’s property market in 2024

In December 2022 the average rate on a mortgage in Italy was recorded at 3.01 percent.

Mortgage rates have risen as a result of the European Central Bank’s interest rate hikes designed to combat inflation, reported Il Sole 24 Ore.

The ECB was expected to starting cutting interest rates later in 2024, further easing the pressure on borrowing, and there has already been a decrease on rates on loans between banks in anticipation.

Italy’s property market slowed down notably in 2023 after growing for the first time in years amid the pandemic, with the number of mortgages granted in the first half of 2023 down by 30 percent on the same period the year before.

The number of property sales in Italy was expected to fall again in 2024, according to the Real Estate Market Observatory from Italian data analysts Nomisma.

They also predicted average property prices will rise slightly, by 0.2 percent, though this was a predicted decrease on the growth of the last two quarters.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

PROPERTY

Can you still buy Italy’s one-euro homes in 2024?

A lot has changed since Italy's 'one-euro' home offers first made international headlines, so are they still available - or worth considering?

Published: 14 May 2024 10:27 CEST
Can you still buy Italy’s one-euro homes in 2024?

The prospect of buying a house in Italy for less than the price of a caffè normale at the local bar caused a sensation back in 2019, when news of one-euro home schemes hit the international headlines.

There was a property stampede in Sicilian towns in particular, with local mayors reporting being overwhelmed with enquiries in English and other languages.

MAP: Where in Italy can you buy homes for one euro?

Even sceptics couldn’t contain their curiosity: Was it a joke? What condition were these houses in? And how much was this really going to cost?

Several years later, we know that these schemes are legitimate attempts to breathe new life into depopulated areas and unburden local authorities of old, unwanted properties that would otherwise be left to fall apart. And in some cases, at least, it has worked – and proved very lucrative for the towns involved.

We know most of these houses are in a very poor state of repair, requiring major investments from their new owners. And we know the costs can be high, with reports of some international buyers spending hundreds of thousands of euros on renovations – many times more than the property’s potential market value.

READ ALSO: Six things to know about Italy’s one-euro homes

But we’ve also heard from some readers who tell us that, while these homes do of course cost more than one euro, for a sensible buyer they can be a worthwhile investment.

Not only are Italy’s one-euro home offers still going strong in 2024, but new towns are joining the scheme, while others continue to announce similar ‘cheap home’ projects such as the rental programme in Ollolai, Sardinia aimed at remote workers – one scheme that’s expected to take off following the introduction of Italy’s new digital nomad visa in 2024.

So what do you need to know if you’re curious about these Italian property bargains?

As ever, if you’re interested in buying a one-euro home you’ll need to meet certain requirements which vary depending on the local authority. After all, this is not a nationwide scheme but a series of small initiatives run by local councils in each town or village, so you’ll need to carefully check the terms and conditions of every offer you consider.

Generally though, the following will apply:

  • Foreign nationals can buy one-euro houses, whether they’re EU or non-EU citizens – but remember owning one will not give you any residency rights in Italy, and visa rules will still apply to non-EU nationals.
  • The prospective buyer can’t just make vague promises about doing the place up: you’ll need to present a renovation plan within 2, 3 or 6 months depending on the village.
  • Buying a one-euro home to turn into a tourist rental business is generally allowed, but you’ll need to let the local authority know your plans when you apply.
  • The cost of the house, all renovation costs, and all notary, legal, transfer and other fees are the responsibility of the buyer.

Some things have however changed in the past few years which make buying and renovating a one-euro home less affordable than it once was.

Many buyers in recent years were further tempted by generous state subsidies available to cover the cost of renovation work – most famously the ‘superbonus 110’ which covered up to 110 per cent of qualifying expenditures.

READ ALSO: What taxes do you need to pay if you own a second home in Italy?

Though the superbonus is now winding down and is no longer open to new applications, it has had a knock-on effect which means renovations in Italy generally take longer and cost more than they used to.

The superbonus scheme’s enormous popularity led to an ongoing shortage of building contractors in Italy, who were booked up months, or even years, in advance.

And as the popularity of these offers has exploded, the most viable properties in some areas now often become the subject of a bidding war, with the sale price rising from one euro to tens of thousands.

Find a map of the towns currently offering one-euro homes in Italy here.

Have you bought a property through a one-euro home scheme in Italy? We’d love to hear from you. Please get in touch by email or in the comments section below to let us know about your experience.

SHOW COMMENTS