Finance > Real Estate > The Italian Property Market and the Strong Euro
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Article rating : 0.00, 0 votes. Author : Dermott Sales
A day does not go by without another alarming story of how the credit crunch of 2008 is affecting the banking system in the US and Britain. Because of the woes of the sub prime mortgage sector in the US, Britain is now facing a very tight mortgage lending regime and loans are becoming more expensive and harder to secure. But how does this affect the Italian property market and the plans of many from the UK who have planned to buy property in Italy in 2008? Houses in Le Marche have indeed increased in price over the last 5 years but it must be remembered that by dealing with a good Le Marche based Estate Agent (Immobiliare) it should be possible to offset the extra cost associated with the strong Euro by negotiating a lower sale price.
The Italian property market is very different from the one in the UK and it helps to know how it works when considering buying a property in Italy. Most young Italians either rent apartments or stay at home with their parents because they are unable to afford to buy a property, so there is not such a demand for buying properties as there is in the UK. In Italy a lot of the time the purchase of a nice car and expensive clothes is seen as more important than sinking a lot of money into a property! Property for sale in Le Marche has often in the past not been put up for sale due to the lack of demand from the local market.
In the countryside many of the farmhouses are often owned by several members of the same family, which can lead to delays and complications in the buying process. Also because the vendors do not need to sell with any urgency as they have no real use for the extra cash, they will hold out for the price they think a property is worth, even if it is highly overvalued.
So basically most Italian vendors do not actually need to sell their properties in a hurry
and so buyers have to be prepared to make an offer which will fit their budget and walk away from the property in many cases if they experience difficulties dealing with the vendor.
In the past six months the Euro has strengthened significantly against both Sterling and the Dollar and so prospective purchasers have seen prices of properties in Europe increase in price by 15%. The current thinking is that the European central bank will have to start cutting interest rates soon, so hopefully we should see the Euro gradually weaken against Sterling and the dollar over the Summer and Autumn.
But it must be remembered that in many villages in Le Marche you can still buy a historic three bedroom village house and restore it to its former glory for around £130.000, so prices are still very reasonable compared to the UK and other Continental countries. Houses for sale in Le Marche are still cheap compared to other parts of Italy and to most areas of France.
Another positive factor is that if you are taking on a large restoration project then the relative costs of the rebuilding work should fall as Sterling strengthens over the next year.
One last important point is to remember that the rest of Europe is in the Eurozone and is not affected by the strength of the Euro to Sterling so the Dutch and Germans who still find Le Marche a great place to buy holiday property will continue to purchase properties in the area. So if you come across the house of your dreams in Le Marche this spring and summer, then be prepared to pay a little extra to secure a wonderful home in this beautiful and unspoilt part of Italy. Houses for sale in Le Marche are still a great investment for the future.
Dermott Sales is a UK based expert in property sales and renovation in and is one of the few specialist Estate Agents in Le Marche. Please contact him on +44 (0)7885 773 433 (UK), 0039 3343256597 (Italy)
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