“In Italy, it is realistic to buy a house for under 25,000 euros.” Houses for 1 euro and the process of buying Italian real estate: interview with experts

Italy is still almost the only place in Europe where real estate remains quite accessible. We spoke with experts about the cost of apartments in Rome and other parts of Italy, how buyers’ attention is shifting away from resort real estate, and potential sources of income.

“The market in Italy is very conservative.”

Ksenia Koshkareva, head of the Italian representative office of Victory estate agency, and Ivan Vorotilenko, CEO of Victory estate, spoke to us about the affordable real estate in Italy, the conservatism of the local market, the program «buy a house for 1 euro,» and much more. 

— How is the Italian real estate market different from other countries? What are its peculiarities?

— The Italian market is very conservative. The purchase procedure does not change. If in Dubai now you can buy an apartment for bitcoins, the Italian notary would have his eyes falling out on the table at such a prospect. Payment by check or even pre-payment before the conclusion of the main purchase and sale agreement is common.

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— In Italy, there are several types of ownership:

• The right of naked ownership or nuda proprietà;
• The right of use or usufrutto;
• The right of residence, diritto di abitazione.

In addition, the right can be divided into the ownership of the house and of the land on which the house stands (case con diritto di superficie).

For example, you can buy the bare title to an apartment and be the owner of it, but you cannot use it as long as the owner of the right of use or the right of residence lives in it.

Also, there are properties that are not fully owned by the seller (he only owns the right to use the land on which the house stands).

There may be variants where the right to the property belongs to the seller and the land underneath belongs to the municipality.

“The strongest price increases are for budget real estate.”

— How has the demand for real estate in the country changed recently, say, for the year? Which properties have become more in demand, and why?

— If you look at the big picture, according to Immobiliare.it, from 2015 to 2020, Italian real estate prices have steadily fallen. This applies to both sales and rentals. From 2020 to the present, the graph shows growth. But, of course, within different segments are different statistics. For example, from personal experience, we see an increase in budget real estate and, vice versa, a fall or slowdown in the high-end sector. Rentals are always in high demand.

In the budget sector, there are now excellent options in major cities such as Turin and Genoa, where you can see a wide range of options for €1000 per «square meter.» At the same time, if we talk about very low-cost options, there are fewer of them, in our opinion.

In general, the market is stable; for the year, the situation does not change dramatically. In Rome, you can now buy a two-bedroom apartment ready for habitation from €100,000. Of course, not in the center, but in this budget there is much to choose from.

If we take Lazio as a whole (the administrative region of Italy with the capital city in Rome—Ed.), a similar option in a city with a population of 30–50 thousand people can be bought for €60,000; in a city with a population of 10-15 thousand people, such an apartment will cost €50,000; with a population of 2–5 thousand people, it will cost €35,000. Even before the pandemic three years ago, a similar apartment could be bought for €25,000. That is, prices are growing strongest for budget real estate and smoother for apartments in the mid-price segment.

When we talk about budget real estate, we are referring to the price range of up to 25,000 euros. Yes, there are many such options in Italy in different regions. The cheapest apartment we looked at with clients cost 9,000 euros. Of course, that doesn’t mean there are a lot of them or that there aren’t any problems there. But you have to look, check—and you will find it.

By the way, we ourselves live in an apartment we bought for 15,000 euros three years ago. This is the main argument when people don’t believe that such prices exist.

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— Italy is famous for its “buy a house for one euro” program in small regions. Based on your experience and observations, what can you say about this initiative?

— Yes, such a program does exist, and different regions have different conditions. Out of interest for ourselves, we calculated a couple of options. All of them seem to be economically unprofitable and on the way out. As we mentioned, in Italy, there is a lot of affordable real estate, and there are no restrictions. Buy, renovate when you can, and live (or rent).

When purchasing a home for one euro, additional conditions are established, such as the need to reside there permanently, the inability to rent, the need for a complete reconstruction in three years with the assistance of licensed, specialized companies, etc. Also, you are limited in your options. Usually, it is a dying town because the program aims to increase the population there. Our verdict is that it is not profitable.

“Taking a mortgage in Italy is difficult even for Italians themselves.”

— Most of our clients who buy property in Italy are from the Russian-speaking audience, in particular citizens of Russia. Previously, many bought the property as a vacation home, but now the situation has changed. Buyers want to live permanently, so the focus has shifted from resort real estate to convenient locations for year-round life. Among these locations are Rome and its surroundings, Tuscany, Liguria, Abruzzo, Lombardy, and, in general, the north of Italy.

In Italy, the procedure for buying property by Italians and foreigners is the same. The main conditions are:

• Identity document.
• Italian tax number (codice fiscale) and money on the account. You can get an appointment in advance at the Italian consulate in your country. It is fast and free.
• Money.

There are restrictions for Russian citizens (you must have an account outside the Russian Federation), but the transactions take place, and the demand is growing.

Getting a residence permit or citizenship by buying property in Italy is impossible.

As for mortgages, in Italy, it is difficult to get one even for Italians themselves. For foreigners (non-residents), this is even more true because the main condition for the bank is the official income in Italy. If you are a resident, have a stable income, and have legal documents, it is possible.

By the way, in Italy, it is possible to conduct remote transactions by appointment. Selection of objects, preparation of detailed video reports, and conclusion of the contract of sale—all can be done remotely.

The main source of income from real estate in Italy is a long-term rental. You can safely receive your 4-6% per year in euros. Realistically, find options with an annual yield of 8–10%.

Short-term rentals, the purchase of homes for renovation, and commercial real estate still present opportunities for profit—here, the yield is higher—but you must comprehend these circumstances and collaborate closely with real estate experts.