Buying property in Abruzzo
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Articles on Italy
What is it about Italy that conjures up so many idyllic images? The fabulous unspoilt countryside? Its amazing cultural heritage? The wonderful food? The way the light sparkles off the sea or sets in a rosy haze over vineyards and cyprus groves? All this, probably and much, much more. Italy is a country that brings to mind romance and dreams rather than the cold, hard notions of profit and loss and this is why so many people end up finding a home here.
Situated on the ankle of Italy lies one of the most beautiful and untamed areas of the country. Abruzzo, with its dramatic mountains, sandy beaches and still-wild national parks, may not have been on the tourist trail or property buyer's map for too long but it's already creating a bit of a stir.
Although it was unknown to many British visitors until relatively recently the region has been popular with Italians for decades. Several well-developed resorts lie along the coast but, for many, the charm of the region is really to be found away from these - in the small coastal villages or among the quiet towns and ski resorts in the nearby mountains.
Property in Abruzzo is divided into distinct categories: newer villas and apartments near the coast; family-size homes in the countryside or traditional stone houses tucked away in the streets of ancient hamlets. Places near to the beach tend to be the most expensive, as a result of the traditional strong demand for coastal accommodation but, according to Pierluca Di Ciccio of Abruzzo, many British buyers are actually keen to buy inland. "The majority are looking for places in the hills, between the mountains and the beach," he says. "They want something detached with land and maybe a pool."
Considering the area is popular with Italians, has budget flights into Pescara and is only two hours from Rome, prices in the region aren't sky high. Those houses with land that so many overseas buyers are looking for can be bought from around £60,000 for something basic and from £90,000 for something in better condition. Di Ciccio also has village houses on his books from £80,000 and beach property from £68,000. More money will obviously get you more property, such as the luxury villa with fountain in the drive costing €1.6 million (£1.1 million) and an apartment in a historic palace with frescoed ceilings for €516,000 (£350,000).
There are also a lot of 'headline' properties on sale for between €20,000 and €30,000 (£13,500 and £20,500). Bear in mind, though, that these will almost certainly be ruins, which could need up to £100,000 worth of restoration work. In addition, planning restrictions in Italy are tight when it comes to old property and often you'll be required to maintain the original character of the building. So you may find you aren't able to knock a ruin down and start again as you planned or put in any modern exterior features such as picture windows, patio doors or conservatories.
Di Ciccio says that prices in the region have increased over the past few years but with nothing like the runaway levels of other European destinations. He also claims that the investment structure is different depending on the market you're going into. "Someone who buys a property for around €30,000 (£20,500) and spends, maybe, €50,000 (£34,000) doing it up could probably sell it on right away for around €100,000 (£68,000)." However, in contrast, he also points out that in the past two years many high-end villas costing €1 million (£680,000) are probably still worth around the same.
Steady annual growth of around five to 15 per cent is his estimate for the next few years, but this depends on the location, with property nearer to the beach or airport rising more. In terms of rental returns, Di Ciccio says Abruzzo isn't necessarily somewhere you should bank on getting high levels of income. If you do plan to rent you'll find summer is when you make the most money, with large numbers of Italians descending from July to September, but you'll need to be as near to the coast as possible to make the best returns.
A good new-build apartment in a beach location will cost from around €200,000 (£136,000) for two bedrooms. This can be rented through the summer for around €600 (£410) per week. In Abruzzo it isn't always viable to expect local agents to manage rental properties inland, so Di Ciccio says people need to be prepared to market rural properties themselves.
However, he adds that the buyers he sees are mainly looking for a holiday home, rather than something to make an income. "The type of people coming here are more inclined towards nature, they want to have the best of all worlds - half an hour from the beach and from the hills. They are looking for their dream house." It's one aspect he and other locals are pleased about. "Obviously, some people intend to invest but we like the idea that people want to come to Abruzzo because it's a nice place."
The attraction of Abruzzo for the property owner, rather than the investor, is almost certainly true but, according to other agents, interest among those looking for long-term returns is starting to pick up. Nikki Di Girolamo of House Around Italy says she has seen Abruzzo gaining in popularity. "The Abruzzo region is very hot at the moment as it has some of the best prices in Italy. The reason for this is that Abruzzo is totally undiscovered and until recently there was no airport."
Di Girolamo claims the best-selling locations are 15 minutes from the beach and around the inland town of L'Aquila. She puts annual capital growth "for most of the properties that the British like" at around 20 per cent and says rental income can reach eight per cent. She predicts that the market for new-build and restoration property is about to open up in the region with lots of new projects from local developers on the cards for next year, and adds that until recently many buyers were indeed second-home owners, but now "it's about half and half. The percentage of investors is increasing due to the great prices and exciting opportunities".
Linda Travella of Italian specialist Casa Travella agrees that investors are starting to see the region's potential. "The market is buoyant and some new inland areas are opening up as people are realising the closeness [of Abruzzo] to Rome." Even so, she puts capital gains at around ten per cent per year and rental income at three to six per cent. "It always depends on where and what you buy. A one-bedroom apartment by the sea is very good for rental."
The most popular areas, Travella claims, are still within easy distance to the airport and the well-developed resort of Pescara, as most people don't want to have to travel too far. "The infrastructure is better in this area or close to the sea in places such as Citt‡ San Angelo and Alba Adriatica. There's been a great deal of development in Pescara over the last few years and you can find many new shops, restaurants and shopping centres."
Casa Travella currently has stone houses in Cita San Angelo from £31,000 and an apartment almost on the seafront at Martinsicuro costing £58,000. Travella says she can also offer buyers new-build apartments with two bedrooms, sea views and lots of outside space from £87,000 but these will be two kilometres inland. For those with less to spend she says there are small, central properties available from £40,000 but these will be in need of internal modernisation or restoration.
Travella says the cheapest property in Abruzzo is in the most rural locations but she advises that they may not be good value once the buyer takes into account the work that will be necessary. One 18th-century property on her books is attractive, has a turret and two hectares of land but needs complete restoration on top of the £124,000 asking price. Similarly, a large rustic house with land is available for just £35,000 but all you'll get is a shell.
Like other people familiar with the area, Travella can see why so many people want to make it their home - even if only for part of the year. "It's a lovely region that has the sea and the mountains in close proximity. The cost of living is also much cheaper than in the UK," she says.
One development that might signify the first sign of change in the Abruzzo property market is San Donato, a residential golf resort near L'Aquila. Properties on the site are being marketed by Overseas Homesearch, which specialises in identifying niche markets. The idea of golf developments in Italy is still a new concept and there are few residential resorts like this. "We're very excited about it, it's just that bit different," says Philip Barker. "My experience is that there's not much golf property in Italy and the setting in Abruzzo is part of the attraction."
When complete, the resort will comprise an 18-hole, Peter McEvoy-designed course, pro shop and clubhouse, plus a pool, fitness centre and hotel with bars and restaurants. The 100 properties on the site will have views over the course and will range from studios to three-bedroom apartments costing from £77,000. Owners will also get discounted golf membership and course fees.
This area of Italy doesn't offer year-round mild weather, although you can golf from April to November. When it gets too cold there's always the skiing in the nearby mountains. Barker says it's too early to be able to predict appreciation or rental income but says he's certain "capital growth will be exciting".
San Donato was conceived to appeal to the international investor, and prospective buyers can expect to find property with a high-specification both internally and in terms of the facilities. However, Barker also says that the company is expecting the majority of buyers to be people who want to own and holiday in Italy first and have an investment second. "People who go to Italy want to experience the flavour and character of the country - to get absorbed into the culture," he comments.
That was certainly one reason Liz Dack decided to move here in 2005. "It seemed a completely unspoilt area of Italy and the fact that the Italians come to Abruzzo on holiday was very reassuring," she says. Dack bought a 100-year-old farmhouse with an olive grove near an ancient hilltop town and paid €130,000 (£89,000) for it. Despite the location being very traditional, settling in hasn't been a problem. "The people are incredibly friendly and welcoming," she says. "The area has something for everyone - national parks, great sandy beaches and winter sports. The history of the region is also fascinating."
And seeing Abruzzo develop into an area as popular with British investors as Tuscany and Umbria will also be fascinating. The lucky ones among us will be those who manage to secure their own dream home there and find out for themselves first-hand.
Read our other articles about buying property in Italy:
well as our overseas news stories affecting the property market in Italy or view our range of property for sale in Italy.
First published in Homes Overseas Magazine January 2007.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
