The Property Market in Le Marche Summer 2009
This time of year is a good time to review the property market in Le Marche over the coming summer season; bad weather, high exchange rates, credit crunch and all.
Bad Weather
Many of the locals say that Le Marche and Italy as a whole are having some of the worst weather in living memory! Winter saw little snow just after Christmas but the snow so common just a few years ago seems to becoming increasingly rare.
Spring has been cold, damp and wet punctuated with a few brief days of warm sunshine here and there. The end of Spring has delivered a lot of rain, many areas are experiencing flooding and we are still seeing heavy mists covering the whole region for several days at a time.
The weather however seems to be on the up, now in the first week of May the sun has made a welcome return we are getting more of the type of weather that we are normally accustomed too.
High Exchange Rate & The Credit Crunch
Whilst bad weather does not help the main reason for a drastic reduction in the number of foreigners currently viewing is the state of the economy in both the UK and the rest of the world.
In particular, the British, who in the last few years have made up the majority of property buyers, are conspicuous by their absence. Whilst visits from potential buyers in the euro zone are down by 30% visits from the UK are down by almost 60%.
In addition to global economic factors UK potential buyers are also hit by the fact the Euro has strengthened against Sterling by almost 30% in the past year. I am not alone in believing that the strength of the Euro is overstated and along with several currency analysts I would not be surprised if we see the Euro start to weaken against Sterling in the next few months. The Euro has already moved from very near parity with Sterling at the beginning of 2009 to an exchange rate of 1.11 euros to one pound sterling as I write in April 2009, and of course this is still along way from the heady days when one pound sterling would by 1.60 euros and this rate will most probably never be seen again. But a gradual move back to around 1 pound Sterling to 1.3 euro would certainly be very helpful to UK based purchasers of property in Le Marche and Italy as a whole.
Stubbornness of Local Vendors
As I have so often mentioned before, Italian vendors are not normally under any pressure to sell their properties, their houses have often been in the same family for many generations in may cases sitting empty and increasingly derelict for many years. Prices of old properties in need of major restoration and rebuilding work have in many cases become detached from economic reality and in most cases will never find a buyer.
So asking prices often do not reflect what is happening in the real world outside of Italy and Le Marche. Vendors in most cases will not reduce their asking prices to encourage a sale, and this coupled with a much lower number of client visits is producing a very moribund property market in many of the villages and towns. Trying to convey this fact to many vendors is often a very time consuming and frustrating experience and normally ends in failure!
New Build
The Italian property market, in common with the UK market has an oversupply of speculative new build apartments, especially in coastal districts and in Le Marche the resorts of Pedaso, Marina di Altidona and many more small coastal resorts are suffering from an oversupply in these apartments. Developers are finding it hard to sell speculative new builds to both the local Italian population and also other Italian buyers from the major cities looking for summer holiday homes and who normally purchase the majority of these types of property.
Bottom of the Market?
I do believe that we are most probably at the bottom of the market for demand by foreign purchasers of Italian property, As the Euro weakens and the economies finally start to recover across Europe, I am sure that we will gradually see an increase in interest from both buyers from the UK and across Europe.
Hence it is really a good time for buyers considering buying property in Le Marche to start investigating the Le Marche property market and understand the local legal issues and to this end would recommend my guide to Buying Real Estate in Le Marche.
