This is by and large one of the most frequent questions we get asked.
Potential buyers from the UK and the USA are often blown away by how far their money can go in Italy. This is not surprising, as they are often able to purchase a property outright in Italy for less than what a deposit would cost back home.
We should preface this article by clarifying that not ALL property in Italy is cheap, as anyone looking to buy in Venice or Milan will tell you, where average property prices are €4,467 (US$ 5,340) and €3,994 (US$4,774) per sqm, respectively!
Thankfully for our purposes, Italy is also full of bargain properties in picturesque hilltop villages, sleepy southern towns and community-minded locations where property is super cheap.
There are a few reasons why.
The Financial Crisis
Prior to the 2008 financial crisis, Italian house prices had more than doubled in value from the turn of the millennium. Unfortunately, the financial crisis hit Italy hard and the real estate market has still not fully recovered even today.
Before the 2008 crisis, many Italians tended to buy and hold their property. Indeed, many are very reluctant to part ways with family property even today. However, with the financial constraints caused by the prolonged economic crisis many Italians are now selling.
Supply and Demand
Most of the really cheap property is in more rural areas and hilltop villages that are experiencing depopulation. This is largely driven by people, especially young people, moving to bigger cities for better employment opportunities.
However it is often the case that younger Italians have inherited properties from older members of their families, often located in places where they have no need or desire for property, and they do not want the burden of upkeep and taxes.
Hence, a lot of supply, combined with lower demand in these areas leads to lower property prices.
There is renewed hope, however, with the rise of remote working in Italy, and indeed around the world, that people will be able to move away from the big cities and perhaps begin to breathe new life into towns and villages that are much in need of it.