Tuscany has for a long time been the focus for foreigners buying homes in Italy. The rolling hills surrounding historic cities such as Florence and Sienna have kept their attraction and the promise of an easy life, despite the country's economy going into reverse.
Last year was difficult for the property sector in Italy and this year may be even more difficult. According to research institute Nomisma, residential property prices fell by 1 per cent nationally in the second half of 2008. However, the market is highly regionalised, with great variations across the country. In general, prices in cities in the poorer south continued to rise last year, while those in the north fell.
Roger Coombes, managing director of Cluttons Italy, believes that the market in Italy is unlikely to crash. One of the main reasons is that Italian banks have generally followed much more conservative lending policies than those in some countries. He believes that the market for the types of properties that foreign investors buy in Tuscany is unlikely to be deeply affected by the economic crisis. However, the slow fall in the overall market may continue this year and even into 2010 before a recovery takes off.
According to Mr Coombes, there is a clear distinction between the markets for local buyers and foreign investors. The market for local buyers consists of houses and apartments for normal residential use, while that for foreign investors has focused on restored traditional properties usually in the countryside that are normally neglected by Italian buyers. In some regions, such as popular seaside or ski resorts, the markets for foreigners and locals may overlap.
Tuscany has, over many years, experienced a huge influx of foreign investors, mostly from northern Europe, especially Britain, but also from further afield. The climate, beautiful countryside, historic cities, cuisine and wine have made the region an irresistible attraction.
It is now recognised that Tuscany has become the most expensive region in Italy. The market for foreigners focuses on rural properties such as farmhouses. According to agencies covering Tuscany, there are many properties available in the range of Euro500,000 (HK$4.92 million) to Euro2.5 million in the region.
In Tuscany and neighbouring Umbria, according to Mr Coombes, a well-restored farmhouse in a good location with three to four bedrooms and a swimming pool will have an average price of about Euro2,700 per square metre, although asking prices in the region can be significantly higher. Prices for top-end large country villas are about Euro6,000 per square metre, and for smaller ones they can be about Euro3,500 to Euro4,000 per square metre.