Germans Snap Up Italy's Luxury Real Estate

International buyers of Tuscan palazzi or villas on the Adriatic have rarely had it so good. A two-year recession coupled with a 42 percent plunge in mortgage lending has shut many Italians out of the market. Uncertainty surrounding a new tax on primary residences has also caused some locals to put off purchases. The result: Residential sales in Italy dropped almost 26 percent last year. Yet sales of second homes to buyers from abroad rose 14 percent, to €2.1 billion ($2.8 billion), according to research institute Scenari Immobiliari. “This is a good time for foreigners to buy,” says Francesca Andreini, owner of Case e Ville, a Siena real estate agency, adding that asking prices can drop by as much as 30 percent during negotiations.

Germans have been particularly active. “I’d say 60 percent of our closings are with Germans, which is much higher than in previous years,” says Yasemin Rosenmaier, a broker with German firm Engel & Völkers who plies her trade in Cernobbio, on the shores of Lake Como. “Why? Fear of inflation, the uncertainty on the financial markets, fear of what happened in Cyprus.”