Stability is returning to the Italian residential Real Estate Market

What sets Italy apart - never mind its enormous cultural stock of stunning monuments and 53 UNESCO World Heritage Sites - is its prime sector, where for once there is plenty of stock available. This means the sector is a buyer's market, where luxury properties are in high demand.

As one of the world's most popular tourist destinations, Italy enjoys year-round tourism for most of the country, but especially in Rome. High quality of life means that many people want to relocate here, not just purchase a holiday apartment in Rome or a villa in Tuscany.

Despite the evident recovery, the number of transactions remains around 39% below their 2006 peak and prime prices are still 30% below their 2008 high. This means vendors have had to offer their prime properties at sensible prices to make them stand out. The international buyer base is widening, with Americans now becoming a force to be reckoned with. Investors interested in the short-terms rental market will find that greater demand for city breaks in Rome - fuelled by the likes of Airbnb.com - means better yields can be expected and generally there is higher demand for city breaks and short term rentals in Italy's major urban centres.

Prices may stabilise further over this year, as transaction levels go up and new buyer markets open up - China is increasingly looking to buy property in Europe. It is still possible to buy a penthouse just steps away from the Vatican for under 2 million euros. The view of St Peter's Basilica is free and St Peter's Square itself is within a 5-minute walk.

Rome is one of the easiest city centres to reach. Fiumicino Airport is only a 30-minute drive away, while Roma Termini train station is a mere 10-minute walk from St Peter's Square. It connects with most major European cities via railway lines.

In 2016, Italy saw around 500,000 transactions across the county, up from 400,000 in 2013, the worst year of the slump, but nowhere near the 845,000 sales transactions recorded in peak year 2008.

What are the most popular areas in Rome to buy prime real estate?

Together with the historic centre, the most desirable areas include Via Veneto, Pinciano, Villa Borghese and Gianicolo, Parioli and Monti as well as the areas surrounding Villa Torlonia and Villa Ada.

Where do Buyers in Rome come from?

The lower end of the prime market attracts around 20% of foreign buyers. Where prices are higher, the share of foreign buyers goes up too. Around 80% of buyers are from the United States of America, as US citizens are taking advantage of the strong dollar versus euro exchange rate at present and Italy has also lowered prices. The next line of buyers comes from France, the UK and Switzerland.

With mortgages now more easily available again, more people are taking the plunge and are buying and investing again. Increased supply of new housing is also helping first time buyers. However, the Brexit referendum and recent terrorist attacks, coupled with problems over banking problems and political crises, are still holding back a more robust recovery.

This may well be the year to buy Italian real estate. Rome is the country's second most expensive market after Florence, yet prices are nowhere near as high as Lisbon's or prices for Paris property. Second homes in Italy are not highly taxed, as about 80% of Italians are homeowners and taxes are raised on primary residences instead.

Luxury property prices ranged from 7,000 to 20,000 euros per square metre in 2016 and haven't risen significantly since.