Rumor has it that historically Sardinians didn’t appreciate being smack in the middle of the Mediterranean. They apparently built their villages and towns away from the sea. They were afraid of invaders that repeatedly arrived on their shores with a certain malevolence. Nowadays, the onslaught comes from another type of intruder: adoring visitors who crowd its airports looking for a taste of the delicious Italian island. And Sardinians don’t seem to mind them too much.
Sardinia boasts 300 days of sunshine, gorgeous white sandy beaches and clear azure waters. Home to many exclusive holiday resorts such as Costa Smeralda, Sardinia attracts well-heeled visitors. The island is dotted with luxury hotels and villas with full yachting facilities. It hosts a vibrant night life and has a fantastic restaurant selection. Backpackers are welcome but intimidated by its costly reputation, many decide to head elsewhere.
Next to Sicily, Sardinia is the second biggest island in the Mediterranean and covers 9,300 square miles. It is an autonomous Italian region. Its closest neighbors are Corsica, mainland Italy, the Balearic Islands and Tunisia. The famous Sardinian coast is 1,149 miles long and has some of the world’s best preserved beaches. The island has become popular “thanks to the spectacular coastline,” said Luca Frau the Managing Director of Domus & Tour, a tour company located in Cagliari, the capital of Sardinia.
While most visitors come for the beaches, the Sardinian inland also has a lot to offer. Travelers looking to explore beyond the coast can hike, ride horses, or camp by one of Sardinia’s mountains, rivers or many lakes.
Being an island, Sardinia has few industries outside of the service sector. Of those few, Granite extraction is one of the biggest and expanding activities on the island. The Sardinian Granite sector represents 75 percent of that of Italy’s, according to Ciao Sardinia, a web portal dedicated to the island. The sector boasts some 260 companies working in over 60 quarries. In addition, Sardinia also produces some 44 million pounds of corks that are then exported all over the wine producing world. The island has also been trying to beef up its IT credentials. That said, agriculture and ranching still remains the biggest economic activities in Sardinia.
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The Sardinian property sector has a few things going for it. For one, development on the island is limited which means the chances of the market being saturated are low. “Sardinia has a low density of buildings and this guarantees a good future property value,” said Frau whose company helps investors acquire, manage and sell property on the island. Under normal circumstances, “owners of holiday rental properties can expect to earn an estimated 5 to 6 percent of their property market price.” In general, investors can also sell their properties after five to six years of initial purchase for a tidy profit. In addition, the island has a bit of an upper class reputation which in turn attracts people who have plenty of extra cash to spend.
The global financial crisis has affected the real estate market in Sardinia but it hasn’t been as badly hit as most other places. Still, some parts of the island have seen a 10 percent price drop according to the Daily Mail (U.K). The market “is stable and isn’t suffering from a real crisis,” said Frau. It is, however, “a bit more difficult than usual” to sell mid-market properties. The basic and luxury markets seem to be holding up pretty well.
Luxury areas appreciate faster, according to Domus & Tour. Properties in Costa Smeralda – in the northeast of Sardinia – tend to bring in top dollars. Porto Cervo, Baja Sardinia, Porto Rotondo, Liscia di Vacca, Pevero, and Pantogia are all popular beach resorts in this area. In the southern part of Sardinia there are sought out places too – the areas of Villasimius, Chia, and their surroundings. If investors are interested in buying inland they can also explore the possibility of buying old farm properties and restoring them.
Prices are obviously subject to a property’s location, in this case largely determined by proximity to the Mediterranean. In general “a basic property not too far from the sea” could cost somewhere between USD 350,000 to 700,000, according to Domus & Tour. Villas with private gardens command much higher prices, running over ten million or higher in Costa Smeralda.
Buying property in Sardinia
International buyers can freely purchase property in Italy. “There aren’t special rules and requirements needed for foreign customers to buy property here in Sardinia,” said Frau. However, “it’s not easy for foreign buyers to obtain a loan from Italian banks.”
Buyers are advised to retain the help of an experienced real estate agent.
“Of course a purchase is not recommended without the assistance of a qualified professional who is able to check everything in advance,” said Frau. A real estate agent or lawyer should be able to ascertain the property’s market price and examine the authenticity registration papers, draw or review the purchase contract and ensure other relevant documents are in order.
The Sardinian property market has managed to weather the global financial crisis relatively unscathed. The market has a reputation for attracting well-heeled investors and as long as it offers high quality products, they will keep on coming. Growth maybe flat or slow for the next few years as the global economy recovers. The market will be “stable for the next year and a gradual increase in prices the following years,” said Frau.