by Eric J. Lyman
ROME, Jan. 24 (Xinhua) -- When billionaire investor Warren Buffett takes an interest in a specific investment, people take notice. And lately, the world's third-richest man has been become interested in property in Italy.
Recent Italian media reports have revealed that Buffett's company, Berkshire Hathaway, is looking into opening a representative office in Milan to follow other European offices in Berlin and London. The Milan office is reportedly a partnership with the Milan-based Maggi Group Real-Estate.
In a statement, Gino Blefari, head of Berkshire Hathaway's HomeServices, praised Milan as "the most important financial center in Italy" and Italy in general for its "excellences, from design to fashion, which attract interest and capital."
Reports are that the Berkshire Hathaway plan includes opening at least seven offices in major Italian centers. Plans are still sketchy, but the company says it has its eye on Rome, Florence, Venice, as well as northern Sardinia, the Tuscan countryside, and the lake districts between Milan and the Swiss border.
Though Buffett's interest in Italy has yet to have a direct economic impact, it could bode well for a slow-moving real-estate sector held down by an economic malaise that has gripped the country for more than a decade.
Buffett is made a name for himself -- not to mention a personal fortune estimated by "Forbes Magazine" to be worth 85 billion U.S. dollars -- by making unconventional investments that turn out to be profitable over time.
Does that mean that Italian real-estate markets, which have seen mostly flat prices over the last several years, could be headed for a price boom? Not likely, analysts told Xinhua.
"The kind of investment Buffett looks at is mostly speculative, sometimes risky investments that seek unusual value," Luca Dondi, an administrator for Nomisma, a consultancy that focuses in part on real-estate issues, said in an interview. "It's not the same way individuals or foreign travelers or small businesses look at the sector."
Dondi did allow that Buffett's interest could help draw attention to Italian real-estate, but he did not anticipate major changes in the sector until more predictable economic growth will convince companies and individuals to upgrade and banks more likely to make loans.
"There is a crisis of faith in the economic future and interest from an investor, even an important investor like Warren Buffett, has only a small and limited effect on that," Dondi said.
According to Mario Breglia, president of Scenari Immobiliari, a research institute that focuses on real-estate-related issues, the Italian real-estate sector has seen an uptick in interest in recent years.
The number of sales nationally has risen about 4 percent per year, which Breglia said is lower than in many other European countries but far better than a decade ago, when sales and prices dropped dramatically.
But even with the rising number of sales, he said, prices mostly remain unchanged from one year to the next. One of the few strong areas, according to Bregila, has been interest from foreigners.
"He is more famous and far wealthier than most, but Warren Buffett's interest in Italy is part of a trend showing more and more interest from non-Italians," Beglia told Xinhua.
"In 2016, real-estate sales to foreigners totaled 8 billion euros (9.1 billion U.S. dollars). In 2017, it rose to 10 billion euros. When the figures for 2018 are tallied later in the year, I think we will see another rise."
