As a global real estate company, Engel & Völkers proudly serves communities in more than 30 countries. From here in the Americas, through Europe and Asia, and down to Africa, Engel & Völkers advisors serve their communities not only as local market experts but also as global advisors, understanding the real estate market on a global scale. In part, this month Engel & Völkers has gathered some information to share with you on the market in one of our favorite Italian cities, Venice.
The romantic city of Venice is located in the Veneto region of Italy — one of the northernmost states. This ancient and historically unique city was originally built on 100 small islands in the Adriatic Sea. Instead of roads, Venice relies on a series of waterways and canals, hence its nickname “The City of Canals”. Venice is unique environmentally, architecturally, and historically and remains one of the world’s oldest tourist and cultural centers.
Venetian Real Estate Market
Due to the large tourism influence, it has always been a major market for short-term vacation rentals. When COVID-19 hit, and tourism dwindled, landlords and vacation rental property owners took a rather large hit, but as restrictions ease so does the grim outlook for the real estate market. It’s for this reason that Forbes named Italy (and particularly Venice) in their most recent article, “Coronavirus Deals: 5 Cheapest Places To Buy Real Estate Now (And Make Money).”
The article quotes Ronan McMahon of Real Estate Trend Alert, a publication from InternationalLiving.com, a site that tracks the best places in the world to live, retire, travel, and invest. Due to the economic impacts of coronavirus, McMahon predicts that prices in Italy will drop and when tourism bounces back in locations like Venice, it will once again open up the market for vacation rentals. “The trick was to buy something old and unloved but in the right location, do some smart cosmetic work and market it better than any of the competition,” says McMahon.
The most sought-after districts and neighborhoods in Venice
Located to the north of the Grand Canal, Cannaregio is the most densely populated district in Venice and very popular with property buyers. The straight main thoroughfare that runs here from the station towards Rialto and San Marco is lined with a multitude of magnificent “palazzi”.
Properties in Dorsoduro, making up the southern part of the historic center, are also in high demand. Landowners, architects, and master builders used the two long strips of land along the waterfront of the Grand Canal and Zattere promenade to realize their architectural visions. This resulted in a genuine wealth of fabulous properties here.
Properties on Giudecca are also becoming increasingly popular. This is a small, elongated group of islands to the south of the city that form part of the Dorsoduro district. It is separated from the rest of the lagoon city by the Canale della Giudecca. The trip from St. Mark’s Square with a vaporetto boat takes barely more than three minutes.
The average price in the top segment
The average price for a property depends very much on its location and views. Exclusive residences directly overlooking the Santa Maria della Salute church or on the island of Giudecca with fabulous views of the Zattere promenade and San Marco basin can reach approximately $16,200 USD per square meter. This means that typically, a 200-square-meter Venetian property with stunning views goes for around 3 million Euros or 3.2 million USD.
Trends and developments in the Venetian market
Investments in the tourism sector
More and more investors are looking for properties to use for tourism purposes. Renting out an apartment short term to visiting tourists is extremely lucrative, with the potential for gross annual earnings reaching as much as 8 to 10 percent of the property’s purchase price.
A growing arts scene
Venice has always been a hotspot for the international arts scene. The Venice Biennale has taken place here every two years since 1895, and always attracts a large number of artists and art enthusiasts. Many globally renowned artists also set up home here, most notably on the island of Giudecca. As demand for real estate there grows stronger, so too are prices rising.
A magnet for the international movie business
Once a year, Venice also transforms into a global hotspot for the film industry. The Venice International Film Festival, founded in 1932, forms part of the Biennale. It is the oldest film festival in the world, as well as being one of the most important and influential alongside the Cannes Film Festival and the Berlinale. It will be taking place again on the Venice Lido September 2-12, 2020 and its international appeal will further reinforce Venice’s credentials as a real estate location.
Incentives from the Italian government
For a few years now, any so-called “High-Net-Worth Individuals” who decide to move to Italy can take advantage of a “Flat Tax,” which requires a lump-sum payment of 100,000 Euros per annum in lieu of income tax at normal rates. Further, emerging from a long period of lockdown, the Italian government has introduced a new “eco-bonus” policy, which includes tax refunds for green projects. The authorities will be applying the 110 percent tax reduction to three types of renovation projects, including building insulation, the replacement of cooling and heating systems in multi-unit buildings, and the replacement of cooling and heating systems in detached properties.
Engel & Völkers Venice
The Engel & Völkers Venezia shop is located in one of the most picturesque areas of Venice, Dorsoduro. Business continues to rebound from the pandemic with a collection of luxury palaces, bright apartments, and stunning penthouses for sale. This includes an exclusive, standalone “palazzetto” property in the Santa Croce neighborhood, overlooking the Grand Canal and with a current layout that dates back to the 17th century and traces of its foundations dating back to the Roman Empire.
Mauro Lozza, Licence Partner of Engel & Völkers Venice, has stated that “despite the difficulties that have arisen due to the Covid-19 outbreak, now is a better time than ever to invest in real estate in Venice. It presents an excellent opportunity for various reasons. First of all, the property market in Italy’s historic centers remains stable. The interest rates for loans are currently very low and residential property prices in Venice are still fairly affordable compared to other European cities like London, Paris, or Munich.”
For further information about the property market in Venice and/or referrals please contact:
Engel & Völkers Venice
Phone +39 041 26 75 222