House Prices in Italy’s Tourist Spots Fall Amid Recession, Taxes
House prices in recession-hit Italy’s tourist resorts such as Capri fell more than in the biggest cities this year as investors grew concerned about the economic outlook and higher property taxes, a research institute said.
Prices of residential properties in 31 resorts across the country fell an average 4.4 percent in the 12 months through September, the Bologna-based institute Nomisma said in an e- mailed report today. That compares with a 3.4 percent decline in Italy’s 13 biggest cities, the report said.
“The severe fall in Italian and foreign demand prompted the sellers to review their asking prices,” the report said. As Prime Minister Mario Monti introduced a new property tax last year, expectations of more levies on real estate “pushed some owners to shorten the timing of their de-investments and this led to a downward trend that doesn’t seem” likely to end in the short term, Nomisma said.
The euro region’s third-biggest economy will shrink 2.4 percent this year as rising joblessness and Monti’s austerity drive weigh on demand, employers’ association Confindustria estimates. The government matched that projection in its growth forecasts released on Sept. 20 as Europe’s second most-indebted economy grapples with the sovereign-debt crisis.
Some of the biggest decreases in prices of resort properties were recorded on the island of Capri, the ski destination of Cortina D’Ampezzo and the village of Positano on the Amalfi coast, where prices fell 5.7 percent, 6.4 percent and 7 percent respectively, today’s report showed.
Home sales in the second quarter posted the biggest drop since data collection began in 2004, the Finance Ministry’s Agenzia del Territorio said on Sept. 27. A property levy, marking the return of taxation on first homes after four years, “won’t be an incentive for the market” in coming months, the agency said in a separate report on June 19.
Prices may keep falling in coming months amid a “widespread perception that the investment in real estates is the primary target of any budget adjustments,” Nomisma said.
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