Italy was called the Sick Man of Europe because its economy was growing extremely slowly. It was only the start, though, of the catastrophic commercial situation the country faces today. But the housing market isn't among the most important reasons of its puny economy like in Portugal. Italian property stock is still feeble, but it does not suffer as much as the other sectors of Italian economy touched by the hard measures.
Economy: Extraordinarily Bad Numbers
Italy's economy has been one of the weakest in the Eurozone since the financial crisis boomed. In 2008, its GDP growth was negative and the 3rd lowest among OECD nations. In 2010, the GDP eventually grew, but stayed among the lowest (7th in OECD). Italy's debt is 120 % of its GDP, the 5th highest in the world, and its govt deficiency is 5.1 percent of its GDP. All of these numbers have caused investors to worry and frozen the Italian market, leading to bond yields going up and markets going down.
Although the EU Central Bank has helped Italians by purchasing large amounts of their bonds, the economy is still bleeding. Italy's bankruptcy is the EU's nightmare: its economy is four times larger than Greece and Ireland's economies combined. While the ECU can help Portugal, Greece, and Eire by rescue loan, it can not find enough money to help Italy's enormous economy. S&P's has downgraded Italy lately, causing another day of turmoil in European markets.
"The point here is that all the stories out of Europe is horrid these days and this is but another in what shall be a long line of ratings cuts for the PIIGS, one at a time," related Dennis Gartman, editor of The Gartman Daily Letter.
Italians base their hopes on the proven fact that the Italian crisis differs from Greece because a lot of the debt belongs to Italians, which allows for more flexibility. The latest government measures should shave more than 54 billion Euro Bucks off Italy's deficiency over 3 years thru spending cuts, tax walks (including raising the sales tax from 20 percent to 21 %), and increasing the reformation of the states expensive allowance system.
Foreigners buy homes in Italy more than in other PIIGS countries, and not only because the Italian market is so huge. Italian housing is also very tasty because it's a well-developed country with stunning landscapes, an appealing history, and interesting cultural specifics. Italy has the eighth highest quality of life and is the 23rd most developed country, so world investments in property are another driver of the housing market. Nevertheless the present situation has brought doubt into Italian markets, and backers are afraid of investing in such a risky country.
The EU allows retired folk to keep many state benefits without regard for where they live in the Union. This has made retiring to a hotter climate an opportunity for many Europeans, so many purchasers of Italian property are retired folk from other EU nations.
Housing Stock: Weaknesses
Housing stock faced significant problems in Italy even before the debt crisis. These included poor quality, about one quarter of housing wanting significant modernization, a dearth of investment emphasis on the maintenance and rebuilding of existing property, and rental restrictions leading to speculation.
Non-public hiring isn't popular in Italy. Due to hire controls, the rental market yielded poor returns. The controls were cancelled in 1978, but thirty years after, only 20 percent of the Italian home market was rental. Today, hire costs can only be increased yearly by 75 % of the price of living index if an owner issues the standard four-year contract. These limitations cause most landlords to wish to ' front-load ' long rental contracts. Hires are high, and citizens prefer buying to renting.
Curiously the Italian mortgage market is littler than those in other Western european countries: at below 20 % of the GDP in 2008, significantly lower than the EU's average of 50% of GDP. The main reason for this figure is the length and cost of the loan recovery process in Italy.
Italian Housing Today: Start of Slow Recovery?
After growing more than 70 percent from 1998 to 2008, Italy did not experience pointed home price falls with the global financial disaster. Italian house prices fell by. 1.5 % in 2010 and 1.2 per cent a year before. The newest report by Nomisma, a well-known Italian industrial research institute, shows the residential market is gradually recovering and leaving the cycle of decreasing house prices behind. The volume of sales grew by 3.4 % in 2010, and the growth is also anticipated in the second 1/2 2011. This tends to imply the beginning of recovery, but while the economy is in trouble, the housing market is at risk too.
Economy: Extraordinarily Bad Numbers
Italy's economy has been one of the weakest in the Eurozone since the financial crisis boomed. In 2008, its GDP growth was negative and the 3rd lowest among OECD nations. In 2010, the GDP eventually grew, but stayed among the lowest (7th in OECD). Italy's debt is 120 % of its GDP, the 5th highest in the world, and its govt deficiency is 5.1 percent of its GDP. All of these numbers have caused investors to worry and frozen the Italian market, leading to bond yields going up and markets going down.
Although the EU Central Bank has helped Italians by purchasing large amounts of their bonds, the economy is still bleeding. Italy's bankruptcy is the EU's nightmare: its economy is four times larger than Greece and Ireland's economies combined. While the ECU can help Portugal, Greece, and Eire by rescue loan, it can not find enough money to help Italy's enormous economy. S&P's has downgraded Italy lately, causing another day of turmoil in European markets.
"The point here is that all the stories out of Europe is horrid these days and this is but another in what shall be a long line of ratings cuts for the PIIGS, one at a time," related Dennis Gartman, editor of The Gartman Daily Letter.
Italians base their hopes on the proven fact that the Italian crisis differs from Greece because a lot of the debt belongs to Italians, which allows for more flexibility. The latest government measures should shave more than 54 billion Euro Bucks off Italy's deficiency over 3 years thru spending cuts, tax walks (including raising the sales tax from 20 percent to 21 %), and increasing the reformation of the states expensive allowance system.
Foreigners buy homes in Italy more than in other PIIGS countries, and not only because the Italian market is so huge. Italian housing is also very tasty because it's a well-developed country with stunning landscapes, an appealing history, and interesting cultural specifics. Italy has the eighth highest quality of life and is the 23rd most developed country, so world investments in property are another driver of the housing market. Nevertheless the present situation has brought doubt into Italian markets, and backers are afraid of investing in such a risky country.
The EU allows retired folk to keep many state benefits without regard for where they live in the Union. This has made retiring to a hotter climate an opportunity for many Europeans, so many purchasers of Italian property are retired folk from other EU nations.
Housing Stock: Weaknesses
Housing stock faced significant problems in Italy even before the debt crisis. These included poor quality, about one quarter of housing wanting significant modernization, a dearth of investment emphasis on the maintenance and rebuilding of existing property, and rental restrictions leading to speculation.
Non-public hiring isn't popular in Italy. Due to hire controls, the rental market yielded poor returns. The controls were cancelled in 1978, but thirty years after, only 20 percent of the Italian home market was rental. Today, hire costs can only be increased yearly by 75 % of the price of living index if an owner issues the standard four-year contract. These limitations cause most landlords to wish to ' front-load ' long rental contracts. Hires are high, and citizens prefer buying to renting.
Curiously the Italian mortgage market is littler than those in other Western european countries: at below 20 % of the GDP in 2008, significantly lower than the EU's average of 50% of GDP. The main reason for this figure is the length and cost of the loan recovery process in Italy.
Italian Housing Today: Start of Slow Recovery?
After growing more than 70 percent from 1998 to 2008, Italy did not experience pointed home price falls with the global financial disaster. Italian house prices fell by. 1.5 % in 2010 and 1.2 per cent a year before. The newest report by Nomisma, a well-known Italian industrial research institute, shows the residential market is gradually recovering and leaving the cycle of decreasing house prices behind. The volume of sales grew by 3.4 % in 2010, and the growth is also anticipated in the second 1/2 2011. This tends to imply the beginning of recovery, but while the economy is in trouble, the housing market is at risk too.
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