While some parts of the world are seeing a drop in property prices and an unstable property market, Italy's property market remains bouyant with increases in the first half of 2007 and further increases expected during the second part of the year.

In 2006 house price growth was reported at 6.3% compared to 10.6% in 2003, 8.7% in 2004 and 7.1% in 2005. It is believed that the slowdown in growth is mainly due to increased mortgage rates but overall the market is still strong, particularly in smaller properties such as apartments and houses up to 60sqM.

The results of a recent Nomisma study put the southern Italian regions at the top of the list for property price increases, where profitability levels are also high and well above the average registered in the whole of Italy. These regions include Calabria, Puglia, Piedmont, Umbria, Veneto, Marche, Abruzzo and Emilia Romagna.

There are many good resons to invest in Italian property:

• No capital gains tax if you own your property for 5 years or more.
• No inheritance tax on properties below 1 million euros
• Lower rate euro mortgages
• Low local/council taxes
• Stable economy
• Good rental potential, no over development or saturation.
• Strict and efficient property purchase procedure laws mean very small chance of deals falling through. Once a price is agreed and deposit paid both parties are liable if they pull out of the deal. The buyer would lose their 10% deposit and the vendor would have to pay double the deposit amount to the buyer. If only the UK had these rules!