Italy s homeowners feel long-term financial aftershocks

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1 Europe Property Italy s homeowners feel long-term financial aftershocks The village of Pescara del Tronto was reduced to rubble in the August 2016 earthquake that hit Italy s Lazio and Marche regions Ivan Romano/Pacific Press/LightRocket/Getty Images AUGUST 24, 2017 by: Christine Toomey In the aftermath of the earthquake that struck the southern Italian city of L Aquila in 2009, then prime minister Silvio Berlusconi urged survivors sheltering in tents to treat the experience as a camping weekend. Eight years later, around 8,000 of those made homeless are still in temporary accommodation. The spectre of crisis mismanagement has hung over the country ever since. On August 24 last year a spate of new earthquakes battered central Italy. Just this week, at least two people died and almost 40 were injured following an earthquake that hit the holiday island of Ischia. Those affected are now determined to handle things differently. The scale of the problem they face is considerable. Last year s earthquakes killed more than 330 people and caused destruction to property over more than 1,000 sq km across Umbria, Abruzzo, Lazio and Le Marche a disaster zone the Italian government calls The Crater. Within this area there have been nearly a quarter of a

2 million requests for inspections of damaged buildings and of the more than 190,000 structures inspected so far, more than half have been declared either permanently or temporarily uninhabitable. More than 60 per cent of the damaged properties fall within Le Marche, an area of eastern Italy bordered by the Adriatic and the Apennines. This area has become increasingly popular with expats searching for la dolce vita. I was among them, falling for an old house in a medieval hilltop town on the perimeter of the Sibillini Mountains National Park. But after faultlines in the central Apennines ruptured, the second home I spent years renovating was declared temporarily uninhabitable. Cracks in stencilled vaulted ceilings on the top floor mean the roof will have to be removed for the damage to be repaired. Among officials, a resolve not to repeat mistakes made in L Aquila is a recurring theme and more control over decision-making and the financing of reconstruction is being devolved to regional authorities. The process is overseen by a special commissioner, Vasco Errani, former governor of Emilia-Romagna, widely praised for his handling of reconstruction after an earthquake hit that northern region in Among the challenges is the need to balance the sometimes conflicting interests of conservationists and the debate about reconstructing com era dov era (as it was, where it was) with the drive to upgrade buildings to higher seismic building standards.

3 Meanwhile, the impact on the local property market has been significant. People are concerned, says Camilla Falcioni, whose five-bedroom villa close to Pesaro in Le Marche is on sale for 2.2m through Sotheby s International Realty. They want to know how far we are from the affected areas and whether my villa is built to modern anti-seismic standards, which it is. Like many vendors, Falcioni says she had already recalibrated the price of her villa before the earthquakes due to a downturn in Italy s property market. As had Paul Janssen, the Dutch owner of a six-bedroom villa in Trodica, on sale for 1.1m through Hamptons International. Even though we have reduced our price by 35 per cent over the past year, there are fewer people looking to buy at the moment, he says. I think the sales market will possibly feel the effect of the earthquakes for the next couple of years. While waiting for a sale both owners are letting out their properties and report nearly full bookings over the summer. Those closer to the epicentres of the earthquakes are struggling with more serious problems. Some whose properties were severely damaged are facing the prospect of them having to be demolished and rebuilt. A six-bedroom villa in Trodica, eastern Italy, 1.1m We have lost our rental income entirely this year and possibly for the next two or three years, says Fiona Biggs, an Irish writer and editor, who with her Dutch husband was renting out an apartment forming part of their six-bedroom country house near

4 Amandola in Le Marche. Their home will have to be entirely rebuilt and they have had to find rented accommodation nearby. While some complain about lengthy bureaucratic procedures that must be followed before work can begin on damaged structures, Biggs says she is very positive about the way the Italian government is proceeding. Given the scale of the problem one can see why it s so complicated, she says. But the housing stock in the affected areas will be so much better in terms of stability in future as a result of all the work that s being done now. This will improve the housing stock for future generations and for Italy. Estate agents are also optimistic that the market for high-end property will receive a boost from the introduction earlier this year of a new tax regime attractive to high net worth individuals. This measure, applicable to those of any nationality who have lived outside Italy for at least nine years, exempts foreign income from Italian tax in exchange for a payment of 100,000 a year. So far, foreign investors attracted by the incentive have been drawn to art cities such as Rome and Florence, says Giovanni Izzo, a Rome-based lawyer offering advice to Sotheby s buyers. Individuals who were willing to purchase properties in earthquakehit regions may be considering a shift to seismically safer areas, he says. Or they may wait for the affected area to recover and then look at the anti-seismic design of properties that interest them. But people s memories are short, says Diletta Giorgolo Spinola of Sotheby s International Realty. The outstanding beauty of these areas in central Italy will continue to draw in foreign buyers. Photograph: Ivan Romano/Pacific Press/LightRocket/Getty Images FT Weekend Festival 2017 Returning for the second year, the FT Weekend s annual festival celebrates arts and ideas with speakers including Simon Schama, Gillian Tett and Lucy Kellaway. Saturday September 2 Kenwood House Gardens, London 10am-8pm

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