The luxury real estate market has evolved and adapted to various new market needs, over the years.
In our Dreamer Talks we had seen how the industry had reacted to the effects of Covid-19 and had drawn a comprehensive overview of what the market trends were.
Let’s look at the current state of affairs and what are the main trends in luxury real estate in 2023.
The luxury property: factor analysis
Real estate markets, generally, can be influenced by various factors, including economic situation, interest rates, government policies, and changes in buyer behavior.
As early as early 2023, the luxury real estate market in Italy, had already experienced favorable trends, with a significant increase in demand, mainly due to the need to diversify investments.
The real estate, is still considered today a “safe-haven asset,” being seen as a safe and stable form of investment, especially in times of economic instability, global changes and inflation.
A number of industry studies show that the interest of foreign investors in the Italian real estate market is growing steadily (about 70 percent of the Dreamer client database is precisely foreign investors).
This, in addition to being a positive sign, also indicates that Italy is continuously attracting the attention of potential international buyers. The reasons for this interest can be different and could include:
- Competitive prices: Italy still offers relatively lower prices than many European cities, which can make buying real estate more affordable for foreign investors.
- Historical and cultural value: Italy is rich in history, culture and artistic heritage, and many properties offer added value from a historical and cultural perspective.
- Remote working: the growing trend of remote working has enabled entrepreneurs and professionals to work from anywhere in the world. Some international clients may be interested in settling in Italy for a few months a year, taking advantage of the country’s quality of life and natural beauty while they continue to run their businesses remotely.
- Quality of life: Italy is known for its quality of life, with its pleasant climate, delicious food, breathtaking scenery, and relaxed lifestyle.
The data confirm that the Italian luxury market is largely a “foreign affair”: 75 percent of buyers of properties priced over 1 million euros come from abroad, and the countries now showing particular interest in the Bel Paese are the United States and Great Britain, followed by Switzerland, France, Germany and part of Asia.
The stable performance of the Italian real estate market during the past few years, especially in the luxury sector with growing demand, is certainly an attractive factor for foreign investors.
Italy is known to be a country rich in history, culture and natural beauty, making it a popular destination for the purchase of luxury properties, given also the tax incentives, such as the flat tax, a decisive factor in further attracting foreign investors.
The interest of foreign investors in the Italian real estate market and the stability of the luxury sector are therefore positive elements for the country’s economy and real estate market.
Luxury in Tuscany
Interestingly, American buyers continue to show strong interest in the luxury real estate market in Italy, particularly in the Tuscany region.
This trend has been recognized for some time, but it still seems to be growing, also favored by the current strength of the dollar and the new trends that are emerging after the pandemic.
Americans’ preference for villas and farmhouses located in the countryside or near the sea or lake reflects their search for properties with a charming natural environment and landscape, typical of Tuscany and other regions, such as Lombardy, Puglia, Sardinia, Sicily and the Amalfi Coast.
Tuscany has been ranked third in Italy for the number of completed real estate sales in the luxury market (properties above €1 million): this clearly indicates its popularity among foreign investors who find the Tuscan landscape and its cultural richness a strong attraction.
The reasons why Americans invest in Tuscany are varied: the search for a vacation spot, the possibility of enjoying a high quality of life, the attraction to Italian culture and art, or the opportunity to own a unique and valuable property.
The Italian real estate market, so attractive, testifies to the country’s continuing appeal and fascination for investors from all over the world.
Technological innovation: the turning point of the Italian real estate sector
The adoption of new technologies in the real estate industry is becoming increasingly crucial to providing customers in the luxury market with innovative and cutting-edge solutions.
The year 2023 is seeing an increasing trend in the implementation of various technological innovations that improve the customer experience and make industry operations more efficient.
Among the most interesting innovations that are emerging are:
- Virtual and augmented reality that enables clients to explore real estate properties remotely, leveraging virtual real estate tours in a realistic and interactive way, offering an immersive experience.
- Artificial intelligence and data analytics that support real estate professionals to better understand the behaviors and preferences of potential buyers, offering increasingly personalized solutions.
- Blockchain smart contracts, which leverages technology in order to simplify negotiation processes and reduce transactional costs by providing secure and easily verifiable smart contracts.
The adoption of innovative and technological solutions, in the luxury real estate sector, could make a significant change, improving the customer experience and increasing the efficiency of operations.