International buyers dominate the market in Italy’s City of Bridges
In the past year, the residential market in Venice has seen stable development with valuations already at a very high level. “Prices have risen continuously over the last 20 years and have remained relatively constant – even after the financial crisis,” said Giacomo Argenio, Office Manager Engel & Völkers in Venice. This stable to upward price trend is owed to the high level of international demand.
Enormous interest from foreign investors
International buyers account for around 70 percent of residential property sales in Venice. 25 percent of these foreign investors are British citizens, constituting the largest group, followed by the French (20 percent) and Germans (10 percent). 15 percent of all transactions involve buyers resident in the Netherlands, Argentina, the USA, Thailand and Switzerland. The majority of buyers acquire real estate as a capital investment and often generate income through tourist rentals. The market is dominated by investors, with only a quarter of buyers acquiring residential property in Venice for their own private usage.
Venezia is the most desirable island in Venice
The majority of Venice’s land mass spans 118 islands in the Venetian Lagoon, while the rest is found on the adjoining mainland. The most desirable residential addresses are located on the islands – with Venezia being most popular amongst buyers. San Marco, Castello and the artist’s quarter Dorsoduro are the most sought-after districts for residential property. The top addresses are along the Grand Canal, the largest of the canals, which forms the main waterway meandering its way through Venezia. Apartments on the upper levels of buildings lining the Grand Canal, with views both of the waterfront and famous historic buildings, command the highest prices. For example, for apartments on the Grand Canal, top prices from 8,000 euros up to 20,000 euros per square metre of living space are currently being fetched. Apartments with views over Rialto Bridge or in immediate proximity to the famous St. Mark’s Square also command top prices. Addresses along the Lido di Venezia, which separates the lagoon from the open Mediterranean Sea, are also in high demand.
On Venice’s mainland (Mestre) the price level for residential properties is more moderate. One exception is the Riviera del Brenta, along the shore of the Brenta Canal several kilometres east of Venice’s mainland. There is a high density here of Palladian-style villas and palaces originally owned by merchants as summer residences.
Venice property market set to enjoy continued stability
Located on the Adriatic coast in the northeast of Italy, Venice and its lagoon form a World Heritage Site. Tourism is the largest industry. In 2011, around 30 million people visited the lagoon city – three times as many as Rome. But while Rome (approx. 2 million inhabitants) is a major city, only around 30,000 people actually live in the centre of Venice. Tourism, which has grown in recent decades, has led to a rise in property prices and the cost of living.
The high level of interest from private buyers and capital investors abroad means that prices for residential real estate in Venice will continue to rise in future. The number of top properties on offer in good and very good locations is only limited. In addition to a large excess demand, the low interest rates in Europe and the recovering Italian economy will be contributing factors in price rises over the coming years. According to Engel & Völkers, initiatives to limit tourist access and reduce congestion in strongly frequented neighbourhoods could make Venice even more desirable and exclusive in future.