Bullish attitude is scarce among property investors. Globally, we seem to be in a period of sluggish growth and low returns, so is anywhere a good buy? In this new series, we dig around in those locations that still have a bit of buzz about them and try to find out whether they deserve it.
The thin crescent of land between the Ligurian Sea, the Alps and the Apennines is famous for its brightly coloured towns, some of which seem to be on the verge of tumbling into the sea. It is a beautiful place, loved by the Romantic poets — Byron had a house in Genoa and Shelley drowned in the Gulf of La Spezia. But since the global financial crisis of 2008, house prices have been in a downward spiral.
By the end of last year, homes across Italy were 16.9 per cent down on their pre-crisis peak, according to the European Central Bank — more than 23 per cent when you adjust for inflation. Falls in Liguria have been less steep, according to Savills, the property agency, down 15 per cent over the same period.
Now agents are confident the market is bottoming out. The problem is, some have been saying that for several years, so why is now any different?
Annabelle Dudley, head of the Italy and Spain desk at Savills, points to a decreasing gap between asking and sales prices, and an increase in transaction volumes. In Liguria, figures for 2016 show a 28 per cent increase on 2015.
“We are also seeing a wider range of buyers from more areas,” says Dudley, picking out buyers from the US and Canada specifically, where favourable exchange rates have increased their spending power in the eurozone.
In the past 18 months, Savills has expanded its operations in Liguria to meet buyer demand, she says. “A lot of people love the Ligurian coast: Portofino, Santa Margherita Ligure, these are incredibly beautiful areas.”
It has certainly brought in the tourists. “Tourism in Liguria is performing well,” says Chiara Lagomarsino Picasso, from an associate of Knight Frank, the estate agency, in the region. She says that, over the past three years, numbers in Liguria have increased by an average of 20 per cent per year.
The Italian government has also made the country more attractive to new residents, especially wealthy ones. The 2017 Budget Law, which came into effect in April, introduced a fast-track visa programme for investors and favourable provisions for people wishing to become tax residents in Italy.
In addition, improvements to infrastructure mean a new railway between Genoa and Milan is due for completion in 2021, and a new marina is being built in Ventimiglia, which will be operated under Monaco’s port authority — the principality has invested a reported €85m in the project.
For now, customers in Liguria have mostly been limited to second- and holiday-home buyers, says Dudley, but she thinks investors will soon get in on the action. “It is on a lot of people’s wishlists,” she says. Aside from Portofino and Santa Margherita Ligure, Dudley cites Camogli, and the Cinque Terre (Corniglia, Vernazza, Riomaggiore, Manarola and Monterosso) among the region’s most desirable locations.
But, while the ever-swelling flood of tourists might increase rental income, yields in the most exclusive areas will still be tight. House prices can top €10,000 per square metre in some of the most sought-after spots, regardless of the market’s downward trend.
Photographs: Valery Hache/AFP/Getty Images; Dreamstime; Krisztian Miklosy/Dreamstime
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