While the Italian residential market hasn't seen the kind of collapse some markets have witnessed, with prices falling by around 7-7.5% overall in 2008 and a further drop of 5% forecast for this year, some districts in the principal Italian cities have seen prices drop by up to 18% when comparing 2006 levels to those at the close of 2008.

According to statistics compiled by Il Sole 24 Ore, Bologna has seen some growth in prices since 2007, but areas like San Vitale-Universita and San Ruffillo have seen prices drop 5% in the period 2006-2008.  Again, Milan has seen positive price movements, but in areas like Vittorio Emanuele, Solferino, Porta Romano, Tito Livio, Sarpi-Canonica, San Siro and Rubens-Gambara prices have remained static since 2007, although with Expo 2015 preparations already underway the property market in that city will no doubt enjoy above average performance in the areas most closely connected to the event.  Florence, in the same period, according to the Il Sole report has seen price contractions of as much as 18% in Peretola and 13% in Fiesole, while in Rome, around the Piazza Epiro, prices fell by 16% between autumn 2006 and autumn 2008.

Some industry experts expect prices to fall by between 1% and 5% at national level in the course of 2009, Gabetti even putting it at 6% overall, while expecting Milan, Florence and Rome to perform slightly better.  However, these are statistics giving an overall picture at national level.  When it comes to the re-sale market the type of property being sold does affect price performance; di pregio or top end properties in the centre of cities are expected to remain in demand.  Similarly, in the second home or holiday home market, a quality restoration or new build with good views and access to the lake, seashore or slopes will continue to be sought after, even if 2009 will continue to see discounts on asking prices once negotiations are underway.

Mid-2009 is expected to be the time when those with capital will see good opportunities as the reduction in transaction volumes of last year translates into a further drop in prices.  As always, though, to find the best opportunities, even in this, a buyers' market, you need to know what to look for and where.