Can I buy real estate in Italy: what do Russians and other foreigners need to know?

Overview of the residential real estate market in Italy

The question of the possibility of purchasing residential real estate in Italy remains relevant. To this day, there is significant interest in the Italian real estate market from citizens of Russia, Ukraine, Kazakhstan, and Belarus. In this article, we will analyze the real estate market, current trends, and price levels, as well as review offers in various price categories.

Restrictions for citizens of Russia

According to decree No. 328, which was adopted on February 25, 2022, by the Council of the European Union due to the escalating conflict in Ukraine, certain restrictions have been imposed on citizens of the Russian Federation. In particular, Russians are not allowed to hold more than100,000 eurosOn bank accounts located in EU countries. Despite this, in practice, there are no direct prohibitions on real estate transactions for Russian citizens. However, as practice shows, opening a bank account in Italy for citizens of the Russian Federation becomes a serious obstacle.

Difficulties with transactions

Even if a Russian national already has a bank account in Italy, the process of making transactions can be quite complicated. One realtor shares the story of a client from Russia who faced difficulties when transferring money from her account, which was opened in October 2021. The bank strongly recommended using this account only in emergencies, as every financial operation had to be approved, often leading to a lengthy bureaucratic procedure.

Ultimately, she was only able to transfer part of the funds through a notary deposit, but this amount was only about300,000 eurosWhen it comes to more expensive real estate, the chances of a successful transaction for Russians are extremely low.

Advantages for holders of residence permits and citizenships of other countries

However, it is worth noting that for those who have already managed to receiveresidence permitIn Italy or holding citizenship from another country (including some states from the post-Soviet space), such restrictions are not an obstacle. Investors in this category can maintain access to their bank accounts, open new ones, and freely acquire real estate.

Realtor tips for closing deals

Realtors working with clients from Russia offer several useful tips. An important aspect is finding a notary who is willing to take responsibility for handling the transaction, as not all notary offices agree to this. Financial transactions for real estate are conducted through a special deposit account opened by the notary to ensure secure payments. We observed a similar mechanism in Spain, as mentioned earlier.

Transfer of funds from Russia to Italy

If the buyer is a resident of Italy and needs to transfer funds from Russia to a personal account or to another person's account in an Italian bank, this is possible through a bank that is not disconnected from the SWIFT system and has the necessary capabilities, for example,"Raiffeisenbank"However, it should be noted that the receiving bank may require from2 to 3 daysTo complete such a transaction due to special processing procedures. There may also be situations where the transfer fails, and the funds are returned; in such cases, it is advisable to try using another bank for the operation.

Conclusion

Thus, despite the difficulties and potential legal and financial obstacles, purchasing residential real estate in Italy remains attractive for foreign citizens willing to overcome various challenges.

Necessity to open bank accounts

In today's world, it is essential to have bank accounts in at least two Russian financial institutions operating in the SWIFT system. The practice of cooperation with Italian realtors demonstrates that neither notaries, nor bank employees, nor law enforcement officers show any bias towards Russian citizens. However, the main problems may arise due to ambiguous interpretation of the new European Union norms and concerns about possible consequences that may arise for the participants in transactions.

Situation for Russians with a residence permit

As for Russian citizens who have a permanent residence permit in Italy or have a second citizenship, their situation regarding the purchase and ownership of real estate can be assessed very positively. Of course, there are certain inconveniences, such as the lack of flights from Russia or difficulties arising from the transfer of funds from local banks. Nevertheless, for a number of people, a real estate transaction is still quite feasible, especially if the expected purchase amount is not shocking and if a notary can be found who is willing to assist.

Investment potential

In terms of investment, the number of Russians seeking to invest in real estate has noticeably decreased due to the restrictions imposed. Wealthier buyers are now turning their attention to the United Arab Emirates, while the middle class is increasingly choosing Turkey as a preferred investment destination.

Opportunities for Ukrainian citizens

Ukrainian citizens are able to open accounts in Italian banks and purchase real estate, but with some exceptions, for example, when buying agricultural land. However, for Ukrainians who arrived in Italy after February 24, 2022, prior registration of temporary asylum is required. This requires an invitation from an Italian citizen or resident who can provide accommodation.

Legal restrictions for citizens of Kazakhstan

Kazakh citizens face legal restrictions based on the principle of reciprocity. Under the agreements, individuals from Kazakhstan are prevented from buying real estate in Italy, and vice versa. But this obstacle can be overcome by obtaining a residence permit and then investing in real estate as a resident, or by organizing the purchase through a company registered in Italy, the creation of which is possible with the help of a notary.

State of the real estate market for Belarusians

For Belarusian citizens who are not subject to international sanctions, quite a lot of options for buying real estate in Italy are opening up. This creates additional opportunities for investing in the Italian market.

Trends in the real estate market in Italy

The Italian real estate market is characterized by its stable trends and low volatility. Even in difficult economic times, as in 2008, the decline in apartment prices amounted to only 10%, while in other countries this figure could reach 40-50%. Such stability is explained by the fact that Italians are very attached to their property and prefer to hold on to it rather than agree to a significant price reduction.

Impact of economic fluctuations on the real estate market

In addition to the above-mentioned aspects, it is important to note that a significant share of the market consists of the luxury real estate class, which is virtually immune to economic fluctuations. It is worth mentioning that the global COVID-19 pandemic has significantly affected the Italian real estate market, as well as many other nations.

A significant drop in sales activity was observed exclusively during the period of strict quarantine measures, which lasted from March to April 2020. However, as soon as the first relaxations became available, the market started to recover, and increased interest from local buyers contributed to this.

New trends in housing demand

Soon, new trends began to emerge, noticeable almost immediately. First of all, it is important to highlight the increased interest in country real estate, as well as properties in prestigious resort areas of Italy, such as:

• Tuscany
• Umbria
• Sardinia
• Veneto
• Trentino-Alto Adige

Moreover, buyers have started to prefer more spacious housing options.

Real estate prices in Italy

The cost of real estate in Italy is characterized by significant fluctuations depending on geographical location. In particular, inTuscany, the price per square meter reaches 2478 euros, while in Lazio, the same price per meter is observed. In Lombardy, the price per square meter exceeds 2174 euros, in Campania it is 1887 euros, and Veneto offers square meters at a price of 1775 euros. Umbria, on the other hand, shows lower prices at 1136 euros per meter, while Sicily ends this list with a price of 1124 euros per square meter.

Rental rates by region

As of June, the highest rental prices were recorded in Lombardy, where the rent reached 15.3 euros per square meter per month. In contrast, the most affordable location for tenants has become Umbria, with a price of 6.81 euros per square meter per month.

Increase in housing prices

Information provided by the Italian National Institute of Statistics (ISTAT) indicates a rise in housing prices in Italy in the first quarter of 2022. This increase was 1.7% compared to previous quarters and reached 4.6% on an annual basis. It is particularly noteworthy that prices in the luxury real estate segment have increased. The agency Knight Frank reported that in 2021, the value of such properties rose by an average of 4%. Despite positive forecasts from experts regarding the Italian real estate market, they express concerns about the potential consequences of rising mortgage rates expected in the second quarter of 2022.

Sale of properties worth over one million euros

According to the latest data from the analytical company Reopla, from 2020 to the first quarter of 2022, there were 4,163 transactions for the sale of properties valued at over one million euros. The majority of these transactions were concentrated in five regions:

• Lombardy - 40.9%
• Lazio - 19.3%
• Tuscany - 14%
• Campaign
• Sardinia

Milan andRome as market centers

Milan, located in Lombardy, serves as a center for the high-value real estate market, accounting for 37.5% of all transactions. The most active areas for deals are Garibaldi, Porta Venezia, and Fiera de Angeli. Rome, situated in Lazio, ranks second with a share of 18.7%. Expensive apartments and villas in the city are concentrated in its historic center. Lucca comes in third with a share of 9%, where elite homes are primarily located in the resort of Forte dei Marmi.

Elite real estate in Campania

In the Campania region, elite properties are concentrated in the province of Naples, where the neighborhoods of Chiaia, Posillipo, San Ferdinando, and the island of Capri are particularly popular. As noted by Reopla's analysis, traditionally, buyers of properties worth over one million euros have been affluent foreigners. However, there is a shift in the composition of buyers: the share of European citizens is increasing, particularly among the British, Germans, and Scandinavians, while the number of Russians has significantly decreased.

Investments in mid-range and low-end real estate

When it comes to real estate in the mid and lower price segments, foreign investors with a budget of 200,000 euros still pay attention to Lombardy, Liguria, Lazio, and Veneto, considering these regions the most attractive for their investments.

Conclusion

In conclusion of our in-depth analysis of the possibility of purchasing real estate in Italy for citizens of Russia, Ukraine, Kazakhstan, and Belarus, it is important to emphasize that despite the existing obstacles, the real estate market in this country continues to attract the attention of investors.

For Russians, especially those who possessresidence permitorsecond citizenshipThe acquisition process can be much simpler and more accessible. However, given the current complex conditions, trying to find a qualified notary and using special escrow accounts are ways that can help avoid many bureaucratic delays and make the process smoother.

The situation for citizens of other countries

The situation for Ukrainian citizens, on the contrary, is significantly more favorable: they can open bank accounts in Italy and purchase real estate, which makes the market open and accessible to them. At the same time, for Kazakhs and Belarusians, the chances of a successful transaction depend on meeting certain legal conditions, which also raises the question of reciprocity between countries.

Stability of the real estate market

It is important to note that the Italian real estate market remains resilient, as demonstrated by the history of the 2008 crisis. Despite global economic changes, Italians are not in a hurry to part with their property and often prefer to hold onto it rather than lower the price. This creates a certain uniqueness for the Italian market, making it a promising option for long-term investments.

Recommendations

Therefore, if you are looking for real estate in Italy, it is important to be prepared for the fact that the process may take time and require extra attention to detail. Good preparation and knowledge of all the nuances will help you realize your dream of owning a piece of Italy, despite the current challenges.

Italian real estate is not just a financial investment, but also an opportunity to become a part ofrich cultureandcaptivating landscapesthis wonderful country.