Demographics can be used to predict the future of real estate markets. Nowhere is this more true than in the hundreds of small towns and villages all over the world. Younger people have been moving out of the small towns in search of fame and fortune in the big city.
Some countries have been experiencing very low birth rates resulting in rapidly aging populations. In the US, birth rates were at 1.77 in 2017 and have fallen another 2% in since 2017. That’s not high enough to sustain the population at a constant level. Demographers will tell you that you need a birth rate of 2.2 in order to hold population constant.
Some countries have increased immigration in order to offset the drop in fertility. In Spain, the number of deaths have exceeded the number of births for years and shows no sign of changing.
Bulgaria’s population is shrinking faster than any nation on earth. Despite having a growing expat population, Bulgarians are leaving the country in droves looking for more lucrative employment elsewhere in Europe. Combined with a birth rate of 1.46, the country is expected to lose 23% of its population over the next 30 years if current trends continue.
A similar trend has been reported in Latvia.
In Italy, the birth rate sits a 1.34, one of the lowest in the Europe. Cost of living, low wages, and difficulty in finding steady employment is the #1 factor that most Italians cite in their decision not to have more than one child.
Dying towns exist all over the country. Italy has been running an experiment to bring new investment into small towns. The most visible was the small town name Sambuca which started offering abandoned houses for auctions starting at 1E. The houses come with strings attached. They have to be redeveloped and a minimum amount of investment in renovation needs to be made.
These auctions have been highly publicized and have attracted thousands of bidders from all over the world.
Some of these centuries old houses in historic medieval villages have sold for 1E. But most have been bid up in price. Some sell for $5,000, 10,000, 20,000 euros. Still, that’s a reasonable deal. After renovation, some owners report total investments of around 140,000 USD for a newly rebuilt home in a slice of paradise in the Italian countryside.
These are small towns where everyone in town knows your name. The owner needs to commit to spend a certain minimum amount of time there each year. Ultimately, the towns want these residents to start businesses and to bring economic activity back to these smaller centers.
Some have been purchased and owner occupied for part of the year, and then put up as short term rentals for a portion of the year.
About 16 towns have initially participated in similar projects 1E home projects. These programs give you a house and Italian residency. Now you will need to pay a 5,000E deposit to make sure you don’t walk away from your obligation to complete the purchase and the renovations. If you don’t complete the renovations within the contract term, then you will lose your deposit that might be more than your purchase price for the property.
Many of them are in the poorest provinces like Sicily, Puglia, Calabria and Sardinia.
But in today’s environment when you can be connected to the rest of the world through the internet, the actual physical location of your home matters less than it might have mattered in the past. There are so many people operating location independent businesses. Their clients are in one location, and they choose where to live based on a lifestyle choice.