It's one of the world's most beautiful cities and the home of good food and culture – it's no wonder that buyers are looking to Venice for their next purchase

Venice might be sinking but one thing that isn’t is its property market. And no wonder: it’s reputation as one of the most romantic cities in the world, complete with gondolas floating down the canals, beautiful buildings, a thriving tourist market and a culture steeped in history - there’s not much to put the potential buyer off. It’s a well-known fact that Venice isn’t the cheapest place to buy property. And yes, it’s true that the most expensive city in Italy keeps on getting more expensive. Over the past few years property prices have risen sharply. Where you could previously snap up a well-maintained property from £200,000 in 2002, you are now faced with a £500,000 tag for a modest apartment on the central islands.

But, if you have the money and are looking to buy abroad, Venice is certainly an attractive location – especially when you consider that prices are not much higher than in other European cities such as Paris and London. It’s also worth remembering that despite the overall trend for higher prices, there are still some good deals to be found, albeit less and less on the central islands.

City attraction
But what is the appeal of this enchanting city? Nicknames such as “La Serenissima” (the most serene) and The City of Light should give some indication. Venice’s unique history means that it is a fusion of traditional Italian Renaissance, Byzantine and Gothic architectural styles. The result – one of the most beautiful cities built by man.

Venice was once one of the most important cities in the world, situated in the north-east of Italy, and comprising 117 islands, it was a trade hub between Europe and the Orient, a fact that was reflected in its buildings and layout. These days, it’s one of the most popular cities in Europe for tourists to visit. The lack of cars, an impressive 150 canals, over 400 bridges linking the islands and the city’s infamous beauty has marked it out as a year-round holiday destination.

Renowned sights such as the Bridge of Sighs, Doges’ Palace, Saint Mark’s Square and the Rialto Brigde are part of the city’s charm. Doge’s Palace, a pink and white marble palace dating from the 12th century invokes the city’s former glories and houses The Triumph of Venice by Tintoretto in the ceiling of the Senate Chamber.

Music fans will appreciate the Gran Caffe Lavena where composer Richard Wagner created many of his great works. (Piazza San Marco 133-134. (041) 522-4070). Another slice of culture can be found at the Peggy Guggenheim Museum, one of Europe’s best. The museum is home to works by some of the greatest artists of the 20th century, such as Picasso, Dali, Chagall and Pollock, collected by avant-garde connoisseur Penny Guggenheim in her former home (Calle Venier dei Leoni, Dorsoduro. (041) 240-5411).

But these attractions are not the sum total of Venice itself. The city is divided into six districts, or sestieri: each one boasting an array of diversions for visitors and residents alike. The sestieri are Castello, San Marco, San Polo, Dorsoduro, Santa Croce and Cannaregio. Castello is the largest and extends from the Rialto to Sant’Elena in the eastern end of the city, San Marco is at the heart of the city with many of the main attractions, while San Polo, Dorsoduro, Santa Croce and Cannaregio are renowned for their excellent dining options and some of the city’s oldest dwellings.

Ease of transport is no small consideration for those who plan to spend time between the UK and Venice or are looking to purchase property somewhere that’s not a long-haul journey away. For buyers in the UK, flights from six UK airports fly to Venice Marco Polo on a regular basis and it’s also easy to reach the city from Brescia, Treviso and Forli airports, all of which are serviced by a large number of low-cost flights each day.

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Architectural appeal
If you ask people what’s at the heart of Venice’s beauty, they might give you several answers – some would say the canals, others the architecture, some the small squares and narrow streets. Architecturally, it is undeniable that Venice is home to more than its fair share of beautiful properties.

The most famous architectural style in the city is the Palladian-style villa (or Villa Veneto) first created by Andrea Palladio. Although only eighteen of Palladio’s original villas survive today, there are over 5,000 villas in the Palladio style built between the 15th and 19th centuries present in the city and they are among some of the city’s most desirable properties. The villas are traditionally identified by their pink stone and neo-classical style and can fetch up to €6,000 per sqm in the city, although again it’s well worth looking further abroad in the Veneto region for more reasonable options.

Traditionally waterfront properties command higher prices and Venice is no exception. If you are looking for a property that’s located on one of the main canals, expect to pay for the privilege. Average prices vary, but expect to be paying well into millions of euros for a prime piece of riverside property.

La dolce vita
Like any Italian destination, eating and drinking in Venice forms a central pivot for everyday life. While it’s easy to get drawn into overpriced tourist haunts offering lacklustre fare, there are plenty of hidden gems offering a true slice of Italian gastronomy for those that care to look. The city’s maritime past served to create a unique cuisine that features seafood, rice, polenta and spices heavily in its dishes. Venetian food is light and fresh but has the potential to be undeniably extravagant when you want to treat yourself to something special.

Seafood connoisseurs and those not averse to an expensive meal should book into Da Fiore, one of the city’s best restaurants. Local seafood dishes are given the restaurant’s signature twist before being snapped up by regular patrons and those who have heard of its reputation from afar (San Polo 2202, calle del Scaleter, 041 523 5310). But good food doesn’t necessarily have to mean expensive food – people are often surprised by the number of reasonably priced options there are for eating. Corte Sconta in the Castello region is a dab hand at the local cuisine and has a wonderful setting (calle de Pestrin, Castello, 041 522 7024).

Those who like to indulge in a tipple or two will not be disappointed. The region’s wines are very palatable; prominent grapes include Pinot Biano, Pinot Grigio, Chardonnay and Merlot along with some refreshing Proseccos. Nearby Bassano di Grappa is also the birthplace of the much-favourted national drink, grappa.

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Other side of the coin
If you have decided to buy a property in Venice there are a number of factors to consider. Winter flooding causes significant damage to many buildings each year, while many ground floor apartments suffer badly from damp. In 2002 the city did start working on flood barriers for the lagoon (the total cost of which is estimated to be between two to three billion euros) but this is not projected for completion until 2012 the earliest.

Because so many of the city’s buildings are so old, restoration can prove to be a problem too. If you are buying a property that is not ready to move into, be aware that getting planning permissions for renovations can be a long process and factor this into your timescale. It rarely happens that moderate changes are refused, but this can also happen, which is something you should be aware of when initially purchasing the property and speak to the notary or a legal adviser about if you are concerned. As with any renovation, if you are not based in Italy while they are taking place, make frequent trips to oversee the project and ensure that it is completed to your satisfaction.

The city’s popularity has also been its downfall. The last register of residents in 2006 showed that there are only 62,000 permanent residents in the city, half the 121,000 population that was present in 1966. With more and more people buying to let, and less “Venetians” to be found, there have been worries that the city is going to become a kind of living museum. With the decline in permanent residents, the number of tourists has increased significantly and currently stands at nine million per year – a problem in itself. While there has been talk of limiting tourist numbers, the city is becoming increasingly dependent on these tourists for its survival as the number of permanent residents decreases.

Conversely, this is good news for the potential buyers – rather than see their city become a permanent circus, Venetians welcome foreign purchasers who are looking to reside in the city and there are always a healthy number of properties on the market to choose from.

A sound investment
For investors, the Venice’s popularity means two things – higher house prices, but also increased potential revenue from renting their property when they are not occupying it. The prices in the area have remained fairly stable despite the current worldwide economic recession and Venice’s tourism numbers have not dwindled over the past year. Those that are looking to buy with a view to renting out their property, be aware that while this is still remaining perfectly legitimate, this is now becoming increasingly frowned on by locals for the reasons above.

If you’re looking to snap up a prime piece of Venice real estate, look no further than the Grand Canal and Rialto areas.
The Grand Canal (or Canal Grande) is one of the major water hubs in the city, slicing through the central districts in a distinctive S-shape. Prices are generally high but consistently so and have remained resilient in the light of recent difficulties, when the rest of Italy’s real estate market has been facing difficulties.

“Among those consumers seeking to add to their real estate portfolio, the top criteria for choosing a property are location, price, amenities and home features,” says Michael R. Good, president and chief executive officer, Sotheby’s International Realty LLC, one of the luxury estate agents dealing with Venice. Indeed Venice can boast of all these attributes and is a relatively stable investment, a big plus in such a volatile property market.

For those looking to make a good investment or find the perfect place to relocate to without the hefty price tag that comes from the central islands, Guidecca is the perfect location. The area is emerging as the place to find lower-priced options on the cusp of the city, where many industrial buildings are being redeveloped for residential use. Only a few minutes away from San Marco by boat, the area is growing in popularity thanks to its stunning views and public facilities; it’s also a lot more spacious than most areas in the Siesteri.

Another sound option can be found in the lagoon islands, especially Murano, Burano and Torcello, which are also paving the way for more moderate purchases in the area where much of the property is priced around €2,000 per sqm.

Veneto region
Should the city’s high prices act as a deterrent, and you don’t find what you want in Guidecca or the lagoon islands, another worthwhile option is to look to the wider Veneto region where there are still many bargains or more reasonably priced options for sale.

The Veneto region is made up of seven provinces; Belluno, Vincenza, Veron paving a, Rovigo, Padua, Treviso and Venice. While Venice is the capital and the most famous of the region’s cities, Treviso, Vincenza, Verona, Padua and others offer the same beautiful ancient settings and welcoming culture. All are excellently linked for international and national transportation options by train, plane and road.

Purchasing power
So the decision to buy has been made, the easy part is now over. Overseas buyers purchasing a property in Italy are often confronted with what seems like endless amounts of red tape. However complex it may seem, the buying process is actually deceptively simple and can be broken down into the following steps. Firstly potential buyers make a proposta, a proposal of purchase that shows that they are serious about buying the property. The proposal outlines the financial offer and has to be accompanied by a non-negotiable cheque deposit of one percent of the property price as an escrow. If the proposta is accepted, this becomes a binding agreement (therefore gazumping is not possible).

Secondly, both parties sign a preliminare – a preliminary purchase contract in which the seller binds themselves to selling to the buyer. The buyer then has to put down a deposit varying between 10 to 20 percent of the total purchase price, less the original one percent deposit. This is also the lengthiest part of the process as the notary will then take about a month (sometimes more) to check all the necessary information and prepare paperwork for the final stage.

The final stage
The final stage is a further contract signed in a notary’s office. The balance is paid and the parties sign the contract at which point the purchaser becomes the owner and receives the deeds and keys. Though it does sound easy, things are often more complicated than the three step process described above. For one, there are often a lot of hidden costs that vary from property to property. As all properties in the country are registered at the local land-registry office, they have a value penned on them by the state. This might differ from the commercial value because of changes made by the owner or depending on its position.

When a house is sold, the sale has to be registered, for which there is a tax – this is three percent of the state value if it’s a first property or seven percent if it’s a second property – a charge that both Italians and foreign purchasers have to pay when buying a house. There is generally an agency fee of around three percent, which is paid in the first stage with the preliminare.

There are also charges for the notary (which is a necessity). For the most part, notary charges don’t vary much, but it is
worth checking a few companies to get a better price. The fees will generally increase with the price of the property you are looking to purchase, so if you are buying a property for €200,000, you’ll pay less in fees than if you were buying one for €800,000. Make sure your notary can provide a fluent service in your native tongue for utmost perspicuity.
Sound complicated? It can be, but the rewards are worth it and, when it’s all over, you can be assured that you’ll have your own slice of the good life.