Italy's Underrated Property Towns: Where Prices Stay Low and Yields Run High

Why an Italian Realtor Is Steering Buyers Away From Como and Cortina

Italian real estate specialist Jacopo Tartaglia, founder and CEO of Valente, has drawn up a ranking of Italy's most undervalued places to buy property. His central argument is that buyers who follow marketing and prestige names into high-profile locations pay a tourism premium, while comparable homes in less-hyped towns cost a fraction of the price and can generate stronger rental returns.

The numbers he cites, based on Immobiliare.it data, are stark. Lake Como averages more than €5,000 per square metre, while nearby Lake Idro trades at around €1,300 and offers an expected return of roughly 7.7%. Cortina's asking prices reach about €6,000 per square metre, against around €600 near Campotosto in Abruzzo. Florence exceeds €4,000, while Pistoia, 30 minutes away by train, sits at approximately €1,500.

His recommended list covers Lake Trasimeno in Umbria, the Gargano peninsula in Puglia, Palermo in Sicily, La Spezia and Genoa on the Ligurian coast, plus a group of small southern towns attractive to foreign retirees. He warns that ultra-cheap homes in abandoned villages are a financial trap, since weak infrastructure, missing shops and poor access to airports and hospitals destroy resale value. For retirees, he highlights Italy's 7% flat-tax regime on foreign income for ten years in eligible municipalities with fewer than 30,000 residents.

Tartaglia says high interest rates and persistent inflation are pushing rational buyers away from Milan, Rome and Florence and toward secondary cities that have universities, hospitals, transport links and tourism potential but have not yet seen mass price growth. His most confident call is Genoa, which he describes as a “Milan of the 1990s” for investors with a five-to-ten-year horizon.

What the Price Gaps Between Hotspots and Alternatives Really Signal

Why the data points away from the prestige markets

Tartaglia's comparisons rest on a simple pattern: the same “Italian lifestyle” product is being sold at dramatically different prices depending on how famous the address is. Because the figures are asking prices from Immobiliare.it rather than transaction data, the gap may narrow during negotiation, but the relative distance between locales is consistent across the country. The prestige locations have already priced in decades of global demand; the alternatives have not.

What separates a bargain from a trap

The analytical core of the ranking is the distinction between Lake Idro and the €1 houses. The cheap abandoned villages usually lack the infrastructure, shops, hospitals and connectivity that allow an owner to rent or resell, making them illiquid rather than genuinely cheap. In Idro, Trasimeno, Pistoia and Genoa, the urban fabric and services already exist; only the price has not caught up. That makes this an infrastructure play, not just a low-price play.

Where the returns come from

The expected returns quoted — 7.7% at Lake Idro, around 5% at Trasimeno, 5% to 8% on Gargano, 6% to 10% in Palermo, about 7% in La Spezia and above 7% in Genoa — appear to be expert estimates combining rental income and expected appreciation. They are not guaranteed yields and are likely pre-cost figures; purchase taxes, management fees, renovation, vacancy and periods without tourism can all reduce the outcome. Still, the common thread is real demand: La Spezia sits beside Cinque Terre, Genoa has a major port and cruise terminal, and Abruzzo claims both mountain and coastal tourism across the year.

The reputational discount in Palermo and Genoa

Both cities are relatively cheap partly because buyers associate Sicily with crime and Genoa with post-industrial decline. Tartaglia argues the image is outdated, pointing to Palermo's port, airport and universities and to Genoa's waterfront renovation designed by Renzo Piano plus rising cruise tourism. That is an interpretation rather than a verified fact, and it works both ways: a weak reputation can also mean slower demand from international buyers later.

Tax rules that shape the buyer profile

Italy's 7% flat tax on foreign income for ten years is aimed at new residents in small southern municipalities, and the article notes that capital gains on a property sale are generally tax-free if the home is held for more than five years. These rules strengthen the investment case Tartaglia makes, but eligibility conditions are specific and tax policy can change.

Steps for Investors Weighing Italy's Secondary-City Property Market

• Compare against local benchmark prices before negotiating: use the article's reference points — Lake Idro at €1,300/sqm, Pistoia at €1,500/sqm, Palermo at €1,400/sqm, Genoa at €1,700/sqm — and check current asking prices on Immobiliare.it.
• Verify infrastructure yourself before buying: Lake Idro is about 60 minutes from Brescia and 90 minutes from Milan or Bergamo; Trasimeno is 20 minutes from Perugia airport and has rail links to Rome and Florence; lack of comparable access should be treated as a liquidity risk.
• Stress-test the yield claims: Tartaglia's 5% to 12% expected returns are estimates, not guarantees, and do not account for taxes, notary costs, management, maintenance and vacancy, so model those costs before assuming a net return.
• For retirees: the 7% flat-tax regime applies to southern municipalities with fewer than 30,000 residents and runs for ten years on foreign income; confirm eligibility with an Italian tax adviser before structuring the move.
• Align the holding period with the tax rule: since a resale after more than five years of ownership is generally free of capital gains tax in Italy, plan entry and exit dates with that threshold in mind.
• Match the location to the use: short-term rental potential is strongest around tourist hubs like La Spezia and Gargano, while Lake Idro is better suited to a recreational second home rather than year-round occupation.
• Hire a vetted local professional for legal due diligence, contract checks and property management before signing, especially in smaller municipalities where foreign buyer volumes are lower.