Should we be looking to Italy for ROI on Property Investment? - Baltimore Post-ExaminerBaltimore Post-Examiner

Should we be looking to Italy for ROI on Property Investment?

As the world becomes smaller, property investment becomes both easier and harder. Easier because new markets are opening, harder because getting into these markets at the ‘right time’ is made more difficult with increased competition.

Finding the right market and getting good ROI (Return on Investment) is never an easy task. However, one market which is gaining traction in 2019 is Italy.

Italy may or may not be everyone’s first choice for property investment. In 2017, property prices declined by 1.2%. In 2018, prices fell by just 0.4%. This improvement looks better when put into the context that last year Swedish property prices declined by 2.1%. However, when stacked against European growth of 4.3% in 2018, there is still some room for considerable improvement in the Italian housing market.

An important factor to consider is the improving Italian economy. A quick scour of the daily investing news will tell you that in Italy, gross domestic product rose quarterly by 0.2% in Q1, and up 0.1% annually. The first quarter of 2019 marked a move out of recession and into growth. March saw Italy’s unemployment rate fall to 10.2%, the lowest it has been since August 2018. Encouraging also was the reading for youth unemployment, which fell to 30.2%, the lowest since October 2011. The employment rate for March increased to 58.9%, its highest for almost 11 years. Clearly, things are improving in Italy. People have more money and are more upwardly mobile than before.

In the markets, investors have been backing Italy, with growing bond and stock investment. However, it’s not just the professional forex trader that is backing Italy. The Oracle of Omaha himself is investing in Italy. At the start of this year, Buffett’s Berkshire Hathaway HomeServices signed an agreement with the Maggi Group Real Estate company to form Berkshire Hathaway HomeServices Maggi Properties. It took Buffett 18 years to invest in property overseas, but just one year after, to invest in Italy. As a rule of thumb, when it comes to investment, Buffett is usually right.

Older properties in Italy are being renovated. The B&B market is booming, and short-term rentals are soaring. Meanwhile, the new build market is showing considerable growth. All in all, the signs are very good for a healthy ROI on property investment in Italy. There are still decent priced properties to be bought, especially in sparsely populated but mostly stunning rural areas. Redeveloping older properties for rental or sale is a steadily growing and lucrative market. With the Italian economy performing better than many of its European counterparts, the growth seen in Q1 looks sustainable for the short and medium term.

Ok, politically Italy may be a bit of a mess. But then again, hasn’t it always been.? There has been a total of 61 Italian governments since the end of World War Two. Political stability isn’t really a thing in Italy. Then there is the impending confrontation with the EU. Debt in Italy is set to hit 135.2% of GDP, far beyond the EU limit of 60%. This sort of deficit can only mean Italy looks on course for a heavy clash with the EU at some point soon.

However, despite the slightly-more-uncertain-than-usual political uncertainty, Italy looks a safe bet for a property investment. After all, what’s good enough for Warren Buffett should be good enough for you.

About the author

Ben Myers

Ben Myers is an experienced freelance journalist, writer, and nomad. Much-traveled, Ben originates from the UK, enjoys spending time with his family, trading the markets, the crypto world and soccer, although not necessarily in that order. Contact the author.

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