Tuscany’s Prime Residential Market Looking Strong


According to Quarter 1 2019 industry findings, Tuscany's residential housing market is regaining some vigour with the prime luxury segment on a much firmer footing.

Over the last decade, prices declined 40% in peak-to-trough terms but prices are now stabilising with Florence and Lucca both recording 1% growth.

International enquiries rather than domestic demand is behind the recent resurgence. It seems that buyers are paying little heed to the political and economic landscape, opting to focus instead on the bountiful, al fresco lifestyle on offer.

For Italy, banking and governmental crises are nothing new. For the wealthy, the €100,000 flat tax introduced in 2017 is acting as a key draw. According to the Minister for the Economy and Finance, Fabrizio Pagani, 150 UHNWIs applied for residency through the scheme in 2018.

Under the initiative, individuals who take up Italian residency benefit from a flat tax on all global income of €100,000. In addition, eligible family members benefit from a flat tax of €25,000.

Linked to this, we have seen a detachment of the super-prime market over the last year with enquiries for properties €10 million or above strengthening. Some of these high net worth individuals already own an Italian home and following the advice of their family office, are keen to expand their footprint in the country, often seeking multiple homes across a range of locations - city, coastal or in The Alps.

In 2018, Middle Eastern, US, UK, Benelux and Indian buyers were most active in Tuscany. While most are looking to acquire a holiday home, an increasing number are seeking a permanent base.

The number of overseas residents in Tuscan cities continues to climb. Almost 100,000 foreign residents now live in Florence, Lucca and Pisa according to Italy's Statistics Office; Istat.

Florence witnessed the largest increase of the three cities between 2012 and 2018, with the number of overseas residents rising by 38.5%

One dominant trend emerging is cash-rich, time-poor clients for whom the once popular ‘renovation project’ simply isn’t on the desirable wish list. Instead, it’s an easy-care, turnkey property that needs minimal upkeep.

Secondly, buyers want to be within an hour of an airport enabling them to make use of the property four or five times a year for mini-breaks and to minimise travel - the days of visiting for a whole month in the summer are largely gone. Finally, most intend to own their home for upwards of five years, often renting it out to cover costs, so bed-bath ratios are increasingly important.

Buyers continue to seek value and with prices in Lucca 20% to 25% lower than in Florence the city is firmly in the spotlight. Lucca is also easily accessible via Pisa Airport; it is located within a 30-minute drive of the Mediterranean and hosts a world-renowned Summer Music Festival.

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