Polish your silver: Brexit could push Britons to buy properties in Italy


Whilst the media are highlighting a sudden pro-remain change in the pools, which the international markets have immediately rewarded by granting the sterling pound with a significant recovery in the last week, internal debate between Brexit supporters and antagonists keeps going, and both parties blame each other for grounding their respective campaign on emotional argumentations.

In the meantime, quietly, more and more countries and institutions in continental Europe (and over the world) are still looking forward to receiving what they consider a suicidal gift from Britain: its self-withdrawing from the EU.

One of these parties is our beloved Italy. Admittedly, we are not used to consider Italy as an opportunist shark waiting for the victim to fall down from the ship: but, together with Frankfurt and Paris, Milan has just started polishing its fin.

Two factors, out of the many, are leading to the above. First, Milan Stock Exchange (Borsa Italiana S.p.A.) is owned by the London Stoke Exchange group since 2007; second, notwithstanding its relatively small value (about 35% of Italian GDP: to give you an idea, London is worth 5 times the UK GDP, and Frankfurt about 50% of German GDP) it is by far the fastest growing index in the world (13%), second only to Shenzhen (66%).

Italian economy comes with its own peculiarities and this could play an unpredictable role in making Britons decide whether to invest in Italy or not: from a financial view point, Italy has never been a country too interested in stokes, differently from Germany, France and, of course, Britain. This means that either the financial market in Italy can be further developed (the optimist view), or that it cannot be developed any further (the pessimist view).

But it means also that non-financial investments are usually more solid than abroad. A comparative index is given by housing ownership. If we consider the four main economies in Europe, 73.1% of Italians own at least one house, against 64.8% of Britons, 65% of French and only 52.5% of Germans. And Britons might well be considering non-financial investments in Europe, as a safety net should their currency keep falling down after a potential Brexit. Last week, new figures have been disclosed from the Chancellor: the property market in Britain could lose between 10% and 18% if UK says goodbye to Brussels and cost of mortgages could increase.

Italy is usually not the country to invest in for those looking for a quick ROI, by renting their properties: furthermore, after a long crisis, prices have been pretty low. But they are again on the raise and, for those who can afford it, there is still room to grab a bargain. Given that London has suffered recently from international investors buying properties and inflating costs, are better-off Britons returning the favour and start investing themselves in Europe, perhaps close to Milan? It is likely that a significant part of the answer will be disclosed on the 23rd of June.

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