Ripatransone, Le Marche

After 10 years selling houses in Italy, here is some advice to prospective buyers that will make the whole adventure more efficient and, perhaps, more enjoyable.

It is likely that when viewing the houses that your extensive internet research of various website has thrown up, you will meet a number of agents from competing agencies. It is also likely that there will be some agents that you prefer to others. Why not stick with the agent you prefer for all your future viewings?

Here are the benefits of this approach:

• Properly briefed (they will be, having already viewed some houses with you) the chosen agent can search for houses in your absence.
• In Italy it is common that agents collaborate, so the chosen agent can check on any properties that you find on competing websites.
• Motivated by the fact of receiving at least a part of the commission, the agent will give you priority over other more speculative clients.

And what will be the cost of your loyalty? Nothing, the amount paid to your chosen agent will come out of the commission you would normally have to pay in any case.

At a time when driving around viewing houses is increasingly costly, this approach will help avoid wasting time and money. Italian agents will thank you.

Needless to say, numbers are down and not by a fraction but a great deal. A notary friend of mine told me recently, that for the very first time in his 35 year career, he had not signed the deeds of a single property transaction during the course of an entire week.

Interestingly though, what is emerging is a market that until now we had not experienced in Marche.

Compared with its more famous neighbours, Tuscany and Umbria, the real estate market is less mature and the region has not yet built a reputation as a smart place to invest, where sheer desirability causes property values to hold their own (better than most) and indeed improve in the medium term. What seems to be happening is that investors in search of desirable properties are looking beyond the tradition regional boundaries. The result is that in Marche where most buyers would buy wrecks to restore, today’s buyers are motivated above all by the aesthetic quality of property and are after beautiful, preferably restored houses whether they be villas, palazzo or farm houses.

This tendency is not proven by any sophisticated statistical analysis but seems to be the prevailing view of my colleagues in other agencies. Furthermore, the average sale value of houses sold by Vinci Properties has risen by more than 115%.

Here is a short list with photographs of recently sold houses.

House Renovation in Le Marche

For those who are tempted to restore a house in Marche but feel that the current exchange rate makes the process too expensive and risky, a talented structural engineer who specializes in the restoration of old farmhouses and villas has teamed up with a local building company to offer their services at very advantageous rates. Which is the secret of this creative professional who is having much success in the Marche region? Simple! The normal Italian fees apply (among the most affordable in central Italy) but will be charged at an exchange rate that is closer to 2008 levels than in now the case. So, for instance, rather than today’s eye-wateringly painful sterling rate (£1/€1.168 on 14/11/2011), the offered rate will be closer to £1/€1.30 provided it is paid in sterling and into a sterling account. This not only translates into a straight 11% discount but guarantees against negative fluctuations in the future. If you are interested in further information, please contact us: mail or visit our internet site

To Restore or not to Restore Property in Le Marche – updated following the impact of the Crisis on the Local Market

This article was originally written when the full impact of the crisis had not become apparent. After 2 years, the bulk of the information remains valid with the exception of the prices of restored properties. As a consequence of this change our conclusion as to whether to restore or not restore has seen a complete turn around. The choice as to whether to restore or to buy a building that has already been restored is very often based on insufficient or biased information. In this article we will provide the information, most limited to the market in the Marche region of Italy, that is vital to making an informed and rational decision.

1. The Cost of Restoring Compared with Current Values of Restored Houses.

The average cost of a house in the countryside that needs complete restoration (substantial structural work, new services and all finishing work to a good standard) is a) €400 – €550/sqm (including purchase costs) with a minimum price tag of around €100.000. Published prices have hardly changed but discounts of up to 20% can today be gained during negotiation.  The average cost of a complete restoration is b) €1200/sqm including tax and architect’s fees. For an example breakdown of costs see http://www.vinciproperties.com/market_information.htm#b1. The recent fall in labour costs is largely offset by the increase in material costs and so €1200/sqm remains a prudent estimate for restoring even in the present economic climate.

Buying and restoring therefore costs a) + b) = €1600 – €1750/sqm

The average cost of buying a ready restored house (with a better than average standard of finish) from a developer is €2000-2500/sqm. Whereas the average cost of buying a ready restored house from a private owner is €1600-25300/sqm (where the standard of finishing materials varies greatly).

Thus, buying a ready restored house can be less expensive than undertaking a restoration. The difference between the cost of restoration and the cost of a finished house is as little as €250 and as much as 700/sqm in the case of a developer whereas a private vendor might take a small loss of €100/sqm or could hold out for a profit of €900/sqm in the case of a particularly rare object.

2. The Importance of the Architect.

It is not difficult to understand how crucial to the successful outcome of a restoration the architect is when you consider what he or she is responsible for:

Design and planning, Recruiting the building company, Surveying, Project management

These four roles encompass just about all aspects of the restoration process and there is no doubt that finding a trustworthy and competent architect is essential to a smooth and, above all, cost efficient restoration process. The architect should be seen as auditor and first line of control as well as designer of the dream home.  The question is, given the importance of the architect, is the risk of not finding the right one too great a risk to take? The answer would be yes if it were not for the fact that there are some safeguards already in place which any owner can take advantage of. Firstly, there exists an official regional price list (il Prezziario Regionale http://www.operepubbliche.marche.it/defaultprezz.asp?quale=generale) which is updated every year or so depending on global material and local labour costs. It therefore follows that a detailed set of plans and the consequent works specification will give an accurate end cost for the entire restoration. This in turn then provides a bench mark for costing plans, for judging quotations from building companies and for surveying.

Secondly, there are laws which stipulate technical build standards, covering all aspects of the structure and the services, that have to be met. If these standards are not met then the local Comune will not issue a “habitability certificate” (Certificate di Abiltabilità) and the house cannot be legally lived in.

Thirdly, the architect is legally responsible for all technical decisions that are made and remains so for 10 years after the work has been terminated.

These safeguards do not entirely make up for the lack of an honest and competent architect but they do go a long way to helping control the main elements of the process and to determining responsibility were problems to arise.

For each horror story of a restoration gone wrong, there are many of successful restorations and happy owners. The trick is to tap into the network of owners that have already been through the process before and ask for recommendations of tried and tested professionals. This, combined with the safeguards mentioned in this short chapter and the owner’s prying eye, will make the restoration just about as easy as it is anywhere else in the world.

3. Controlling the Building Process from Afar

Quite apart from communicating regularly with the architect (see above), there are other ways of keeping an eye on progress, making sure that costs are controlled and that important decisions are not being made in the owner’s absence.

Firstly, there are a number of project management companies, such as Treehouseitaly, that will not only manage the restoration process on your behalf, but that will also convey in precise terms the essence of what the owner is aiming at – this can be very difficult to do without fluent Italian. A project management company will be at pains to make sure that the owner is kept abreast of developments and that tiresome problems are dealt with so that during a visit the owner can use his time efficiently.

Secondly, there is an increasing number of building companies that employ digital technology to keep clients informed of progress. Take for example Panichi Srl, a building company from Ascoli. On their web site there is a page, reportage, dedicated to each building site with options to see progress by clicking on any specified day or week. To take things a little further, Panichi Srl will also do a live webcam report whilst walking around the site. This means that individual problems can be handled without interrupting work in progress.

Clearly, the owner’s presence on site is essential when the restoration is in its final phase and questions of style and taste of finish arise. But with a good team of professionals much of the restoration process can move forward without owner intervention, especially in the early stages where only good technical knowledge will allow any sort of worthwhile contribution – how many owners, for example, know enough about underpinning to be able to judge work well done or not?

Finally of course, owner control is underpinned in the contract agreed with the building company. A well written contract will give the owner financial leverage (no payment until work is satisfactorily complete) and will include a clause on procedure in case of unforeseen issues.

4. A summary of the pros and cons of restoring.

Contrary to our  advice when the market was buoyant, we now believe that it makes better financial sense to buy a restored property rather than a house to restore. Quite apart from the negligible difference in costs, in the case of the restoration process one should factor in both the potentially damaging and fluctuating exchange rates and the costs of overseeing the work (flights, hotel bills etc).

That said, when buying a restored property it is most important that a thorough survey be carried out. This may seem obvious, but it is curious to note that whereas surveys are normal practice “at home” very often they are dispensed with when abroad in the name of simplification. Since the Aquila earthquake 2 years ago, building standards have become very exacting and the danger is that a routine piece of structural maintenance may also require the redoing of foundations and supporting walls. There are, however, many conscientious structural engineers who, for a few hundred euros will provide the necessary report.

Perhaps though, the crux of the matter is style. The question of whether or not the currently available selection of restored houses for sale includes the “right” house is all important. The Marche property market aimed at sophisticated foreigners is relatively immature when compared with Tuscany and Umbria and the prevalent style of finish, although generally very well executed, tends to be rustic – most developers turn out a standard traditional finish (terracotta floors, wood beams and white walls) and, for lack of experienced architects, most private owners played safe and followed suit. If you are after a more contemporary feel then the choice of finished houses on sale is limited.

At this point, it would be useful to introduce a little known third option, the turnkey property. Priced somewhere between private vendor and developer prices (€1750-€2200/sqm for the finished house), this option enables the purchaser both to dictate the style and to obtain a guaranteed final price so eliminating the potential danger of unexpected cost increases that inevitably occur during the restoration process. Turnkey projects are not very widespread and are usually sold by developers or far thinking architects that have entered into agreements with private vendors that are contractually bound to sell their property along with the wreck-to-restored package.

If you are thinking of investing in Le Marche you might want to see the statistics we have compiled concerning buyers requirements. The statistics have been drawn from 2 full years work 2007 and 2008 before the economic crisis and prove interesting reading. The actual requirements are those that clients mentioned as “fundamental” when first contacted.

There are not enough statistics over time from which to draw a trend, but there is other useful data to help the investor - for instance, it is perhaps not surprising that 88% of all buyers want to be in the country, but it is important to note that half of those buyers want to be near a village. Also fundamental is the indication of size required. Three and four bedrooms are equally popular but five bedrooms are half as popular.

It would seem that the most poular combination is a 3-4 bedroom house in the countryside that requires restoration, has panoramic views  and more than 1 hectare of land. And if you can add an annex, space for a pool and proximity to a village, you’ve hit the spot.

Fractional Ownership – a new way to own property in Le Marche

Fractional Ownership has been around a long time, especially in the USA where it is a multi-billion dollar industry, but most people in Europe are just becoming familiar with this approach to buying and owning property. It is a very simple and cost effective way of owning a second home without all the hassle and cost of running and maintaining it.

This method of ownership allows the consumer to buy a part share in an asset (the property) that would otherwise be outside their budget.

Buying a fantastic 4 bedroom, renovated, fully furnished farmhouse with a large swimming pool, tennis court, vineyard and magnificent views, in Italy, is out of most people’s reach but buying just a few weeks in that property suddenly makes it much more accessible!

You are able to buy the number of weeks you will actually use annually, not have a house that is likely to sit empty for most of the year. Your budget goes so much further when buying through Fractional Ownership, and you only pay your portion of the running costs while having someone else oversee the maintenance and management of the property. The headaches of buying and owning a second home outright are removed. You get all the enjoyment of owning your own second home without all the hassle.

Some often used phrases to describe fractional ownership are ‘multiple parties owning an asset’ or ‘shared ownership of an asset in perpetuity’. This differs from ‘time share’ in that the asset is actually owned by you, rather than having just a right to use time in a development for a limited period. You have the right to sell or gift your share in a fractional ownership development and it could appreciate over time. A share can be purchased in the name of an individual, jointly, through a company or a trust structure.

There are a number of ways of structuring a fractional ownership development; one method is to have a UK based company own the property. There are 52 shares corresponding to the number of weeks available. Clients can buy as many shares as they wish and time will then be allocated in the property to correspond to the shares purchased.  In simple terms ‘the company owns the property, the shareholders own the company’. By structuring this way you are able to avoid the normal legal and tax issues associated with purchasing a property outright in Italy. Appassionata have handled all of these complexities and costs when originally purchasing the property through the UK Company.

To ensure that all owners get equal access and use of the properties throughout the years of ownership there is a Rotating Residency Calendar (RRC). This calendar will move your weeks each year so that you will enjoy all the seasons. The calendar is published in advance and weeks can be swapped between owners. Owners who purchase 3 or more weeks of ownership will be able to link two of those weeks together on the same rotating basis. This is the fairest way of assigning weeks and the starting point will be allocated on a first come first served basis. Two weeks of the year will be held in ownership by the developing company for maintenance purposes and where possible to assist owners to swop weeks.

The properties will be fully furnished to a very high standard, as you would your own home, they will not look like holiday rentals. The aim is to attract an affluent, aspirational customer who wants to share in something they cannot buy outright. To be able to say ‘I own a country house in Italy with a swimming pool, tennis court and its own vineyard’ is true, whether you own one or more weeks.

Finding an amazing location is also part of the development process. Le Marche is situated on the east coast forming the calf of Italy. Set against a mountain backdrop with a picturesque landscape of vineyards and olive groves dotted with small farms and medieval hill top villages. There is a wonderful coastline with lovely sandy beaches only 15 minutes drive away. This is authentic Italy, untouched by mass tourism and extremely welcoming to foreigners.

The first project will  be launched in the spring of 2009.

To further explore the opportunity of fractional ownership please conatct David Parish at david@vinciproperties.com

Since the last six monthly review written in July, the Marche property market has not changed very much. Given the circumstances, this may seem a very odd statement, but it is not if you consider the distinction that must be made between the effect of the credit crunch on buyers and vendors.

The current situation.

To most foreign purchasers, the credit crunch and all the consequences it has had on the economy has meant that the best policy is to wait and see what happens to the market and personal circumstances before buying. The result has been a drastic reduction in the number of foreigners currently viewing or buying. In particular, the British, who in the last few years have made up the lion’s share of the buyers, have almost completely vanished. There are some prospective buyers from the eurozone still looking, although numbers are down by about 50%. Interestingly, many agencies are noting a small increase in the number of non local Italians looking for a bargain.

To most vendors, the crisis has not had such an effect that they are forced to sell at rock bottom prices, firstly because they, like most Italians, are not heavily leveraged and secondly because selling the ruin is simply an option rather than a necessary step on the property ladder. There has infact been very little evidence of a drop in advertised prices.

Generally speaking then, despite demand collapsing, house prices have not followed. The question is – where are the good opportunities?

The most obvious bargain is to be had when buying from British owners of restored houses. Desperation to sell combined with a particluarly weak pound have brought prices down by about 20-30% and may go further. Be warned however – many second home owners carried out minimal restoration work on the basis that they would “make do” for a couple of weeks each Summer. It is essential that buyers fully understand the condition of the house they intend to buy as costs to repair shoddy restoration work can quite easily overshadow the gain made on a seemingly good price.

Less obvious is the bargain to be had when buying from those Italians that need cash for one reason or another. So as not to lose face, many local vendors will not publish a price decrease but, having noticed a dearth of foreigners in recent months, will negotiate quite substantial reductions. Local agencies say that 15% drop can be obtained. In this case, the trick is to find an agency that knows where the opportunity exists.

Investment in the Region

They say that a recession is a good time to invest and this cerainly seems to be the case in Le Marche.

An international group based in Milan is finalising its plans for a €150 milion euro investment in 3 championship standard golf resorts. The resorts will be spread throughout the region and will combine what the group has termed as “Heritage and Tourism”.

The idea is that the resorts will revive the areas they will be in by concentrating as much on social issues, restoring existing buildings and encouraging local farming, as providing high standard golf courses for tourists.

The first resort,called La Rocca di Montevarmine, will be near Carassai in the province of Ascoli Piceno and building will start before the Summer.

There is  no doubt that this investment will have a huge effect on holiday home property prices. If the resorts go as planned, Le Marche will shotly be the number one region for golf in Italy.

Virtually untravelled by Toscana-happy Americans, Le Marche is an excellent culinary example of cross pollination. The inherent richness of northern neighboring Emilia Romagna is made evident through rich pasta dishes like Vincigrassi, a kind of lasagne made with chicken liver ragù and black truffles; and another dish called Passatelli, bread crumb, egg and cheese dowels served in rich chicken broth with lots of grated cheese on top. The relatively spare cucina of western neighboring Umbria is more obvious in dishes like Potacchio, a spicy stew of rabbit or lamb (or even monkfish), or the simple charcoal-grilled meats that appear on every trattoria menu. The more south central bent is also evident in products like the simple soft salami made in Fabriano, the excellent dried pasta made by the Latini family in Osimo, or the farro produced by Fattoria di Montesecco. (read more…)

When we were looking for properties in Italy we came across a fair number of real estate agents; some of them good, some of them terrible. Some of them had listened really well to our wishes and others just showed us houses simply because they wanted to. We also discovered that some agents were registered agents and others weren’t. It turns out that in Italy a real estate agent is required by law to be registered at the Chamber of Commerce. Prior to this registration the agent needs to follow a course and pass both an oral and a written exam.

When we decided to move to Le Marche to start a new life as a real estate agent we did what we were supposed to do. First we enrolled at a training centre to follow a course for real estate agent. The course comprised the following subjects: tax law, civil law, legislation regarding the real estate business, economics and mortgages, planning permission and surveys. After that we had to take two written exams and one oral exam in Italian covering the subjects mentioned before. After we had passed the exam we could officially register as real estate agents (nr 874 and 875 of the Ruolo at the Chamber of Commerce of Macerata).

Doing the course we realised how important it is to have done so, because now we can answer all the questions our clients may have. As qualified agents we feel that we can provide the best service possible to our clients.

Carlien and André van Lieshout

To understand the costs of restoring a farnhouse, see this actual example of restoration.

11% of all property acquisitions in Le Marche are made by foreigners. It is the most successful of all the (Italia) regions. In the last few years growth has been from 2% in 2003 to 11% in 2006.

The Guardian, Saturday June 14, 2008

Jane Dunford on her ultimate hideaway in the Sibillini mountains, plus our top undiscovered mountain destinations

The Apennines, Italy

According to Italian legend, the body of Pontius Pilate was dragged by wild oxen from Rome and dumped in a lake high in the Sibillini mountains in Le Marche, known today as the Lago di Pilato.

(read more…)

Sorry, this entry is only available in Italian.

Sorry, this entry is only available in Italian.

Advantages of listing a building

- For each restoration undertaken it is possible to apply for a government grant of between 30-50% of the cost including professional fees- usually 30% in actually given.

- 19% of the cost can be written off against tax.

- The State pays up to 6% of the interest of the mortgage related to the cost of buying a restoring listed building.

- Inheritance and purchase tax are lesser than normally the case.

- Rental income is hardly taxed at all.

- Property tax is around ¼ the normal level.

(read more…)