Return on investment
Historically Italy had one of the largest percentages of private property ownership in Europe.
This is now rapidly changing and is currently unsustainable: Lack of private and institutional capital; the scarcity of Mortgages; familial breakdowns (divorce; separation); a growing number of Singles, Divorcees and aspirational unmarried young couples, all looking for modern places to live that reflect their new non-traditional Italian.
These factors are fuelling the increase in the demand for rental properties in the market.
Rental contract norms in Italy are a standard 4 years and automatically renewed for another 4 years, making rental income very stable and in some cases, tenants tend to stay in the property for over 15 years. Rental rates are dictated by market demand.
The current situation creates a perfect scenario for investment: properties at a historically low purchase price with little capital available locally for property investment and rental properties in high demand.
The current scenario locally is yielding an annual return on investment of 5/7%, with an average capital increase of 4% per annum.