Friday’s Die Welt newspaper suggested the economic crisis was turning Italy into a good option for German second-home bargain hunters. At the same time property prices in many regions of Germany have been rising as people seek safe investments.
A German expert in the market told the paper that Germans had often been frustrated when looking for a second home in the tiny German-speaking area of southern Tirol. By the time German buyers amassed a list of potential properties, they had been sold to Italians, the paper said.
The crisis has changed this, said Heinz Neuhauser, the director of the south Tirol estate managers association.
“Germans who are looking for a vacation home in southern Tirol no longer have to drop everything anymore and immediately cross the Brenner Pass to look at an interesting potential piece of property, said estate manager Stefan Hintner of Vettori Immobilien.
Waiting a bit is a good strategy, estate experts said. Prices have already dropped more than 20 percent, but economic forecasts say a further drop of seven percent is possible.
A two-room apartment in one area that sold for €230,000 in 2009 is now on the market for €170,000, for example.
A key reason is the recession that has hit Italy hard and that has translated into a strong drop in domestic demand in Italy. The country’s economic performance has declined by six percent since 2008 and is still moving lower. Unemployment, now at 10.7 percent, is expected to top 11 percent. More Italians are worried about losing their jobs and are therefore shelving any plans they had for a second home.
The increased vigilance of Italian tax authorities could also be playing a part – those seeking to hide untaxed money are more likely to park it abroad, in places like Switzerland rather than putting it into property at home.
The changing property picture has been to foreign buyers’ advantage and those in nearby Germany stand to gain, said property agent Neuhauser. “We’re seeing more demand from Germany,” he said.