In reality, there’s never a perfect time to buy a house anywhere. The property market and global economy change rapidly, but whether you should buy a property or not also highly depends on your personal financial situation more than anything. Nevertheless, there are certain elements in the Italian real estate market that are important to take into account. Are property prices falling in Italy? Is 2022 a good time to buy property in Italy? We explain everything.
Current real estate market in Italy
While your personal financial situation is key in deciding whether it’s the right time to buy in Italy, there are several other factors in the Italian market that could also affect your decision whether to buy or rent. With pressures on demand in certain parts of the country, you have to act quickly to get the house of your dreams in Italy, as well as taking the following points into consideration.
Rising interest rates
One of the challenges faced by potential home buyers in Italy in 2022 is taking out a mortgage. Euribor interest rates, on which Italian mortgages are based, are rising thanks to inflation and the war in Ukraine, meaning higher mortgage instalments and more pressure on household budgets. For more information about mortgages in Italy and how much you could pay, check out the idealista/mutui mortgage simulator and find your mortgage.
Italian house prices on the up
House prices in Italy are on the rise and this upward trend is set to continue throughout the year. In spite of this, according to real estate experts, prices are expected at a steady rate and not as rapidly as in other EU countries. In spite of rising prices, the residential real estate market is showing its resilience and people are committed to buying property, considering it a safe investment in 2022.
Mortgages for young buyers
For those who are under 36 and wish to buy their first home in Italy, banks have special rates as part of Italy’s “bonus prima casa” (first home bonus) which is part of the government’s Sostegni-Bis Decree. If you’re buying property in Italy in 2022 and fit the criteria, make sure to check all the options with banks, as you could save a lot, especially when it comes to taxes.
Therefore, for young people planning to buy property in Italy, now could be the perfect time. Originally set to expire in June 2022, the measure has been extended to December this year, giving buyers a further opportunity to get financial help with purchasing their first property. Note that this applies to everyone who is an official resident in Italy and for properties up to a maximum value of 250,000 euros.
Buy or rent in Italy in 2022?
For those undecided as to whether buying property in Italy is the right choice, renting is also an option. This depends on your financial situation, whether you can afford to pay a deposit for buying a house up front or not, and whether you intend on staying in Italy for a long period of time. For more details, check out our guide on whether it’s better to buy or rent property in Italy in 2022.
Is it better to buy a house or rent? Both have their advantages and pitfalls and this eternal question is now even more relevant in Italy due to the coronavirus health pandemic, a changing real estate market and new trends in the market. The experts at Tecnocasa are going to give us some answers, looking specifically at the case of Milan, Rome and Naples.
At the moment, interest rates are still particularly convenient, house prices are low (although in some cities they have started to rise) and rental prices are also on the rise. The analysis of the convenience of buying a property, rather than choosing to rent, takes these variables into account:
- a medium to well-used apartment typology
- properties located in three areas: the centre, semi-centre and outskirts of Milan, Rome and Naples
- the purchase of both two-room and three-room apartments
- a 25-year mortgage, at a rate of 1.35%, with financing of both 70% and 80% of the value of the property, with sufficient liquidity to cover at least 20% of the value and additional expenses when the loan is taken out
- comparison of mortgage instalments with rental payments
- the level of income needed to access credit
Let’s have a look at the results of the analysis in each of the cities:
Milan
In the most central area of Porta Romana-Crocetta, for a two-roomed apartment worth 393,500 euros and a three-roomed apartment worth just over 520,000 euros, mortgage installments are always lower than rent, both with 80% and 70% financing. For this reason, purchasing a property is the best choice.
In the semi-central area of Solari-Foppa, both in the case of buying of a two-roomed apartment and a three-roomed apartment with 80% and 70% financing, the installment of the loan is lower than the rent, with rent set around 1,600 euros for a three-roomed apartment and 1,200 for a two-roomed apartment.
In the outskirts in the Barona-Santa Rita area, not only does buying a property always come out on top of renting (with rental prices from 950 to 1,200 euros), but the gap between rental prices and mortage installments gives a clear advantage to the latter.
Rome
In the centre of the city in Ghetto di Roma (the Roman Ghetto) for example, a rental lease is the most convenient option. For a two-roomed apartment, worth 529,000 euros, you would pay monthly rental of around 1,200 euros per month against a mortgage installment of 1,660 euros. Even in the case of a three-roomed apartment valued at 703,000 euros, it is always worth renting: rent would range from 1400 euros and mortgage installments from 2210 in the case of 80% financing.
In the semi-central area of Prati-Cola di Rienzo and the suburbs, Centocelle-Faggi, buying property comes out on top, and in particular those with three rooms, as mortgage installments work out at almost half the average rent.
Naples
In Naples, purchasing is always the best option. The only case where this could be argued is in the case of the three-room apartment financed at 80% in the Fuorigrotta district, where mortgage installments and rent are on a par with each other (717 euros for mortgage installments and 700 euros rent per month).