Venice property: a new haven for overseas property investment A report on the first half of the year from the Italian economic research institute Nomisima highlighted Venice as the most expensive city in Italy, closely followed by Rome and Milan. "Don't expect to find even a small apartment in the historic centre on a canal, even a secondary canal, for under a million euros," Paul says. And he warns buyers that it is a specialist market. "Be careful about buying a property to restore," he says. Restoration costs are much higher than in other cities as everything has to be brought in by boat. Also, there are often restrictions on what you can do to an historic building. External facades with exquisite ornate plasterwork, columns, archways and balconies are fiercely protected. The landscapes of Canaletto cannot be messed with. Buyers must look to the periphery of San Marco to find more affordability. Prices drop slightly in the tight streets and squares of Santa Croce and San Polo. Close to the Rialto Bridge you can pick up an attic apartment with one bedroom and a roof terrace at €450,000 (£373,000). Or in the Castello district, beyond the Bridge of Sighs, heading east in the direction of modern Venice, there is a third-floor two-bedroom apartment with views of the San Giorgio dei Greci church with its leaning campanile at €760,000 (£630,000). "Quite rare," says Paul, who has spotted both properties for potential buyers. A huge event is taking place out on the lagoon, which is expected to create a magnet for international money in 2013. The Grand Hotel Des Bains, the ultimate fin de siècle Art Deco hotel, is being restored as a millionaires" enclave with 15 hotel suites, 58 apartments and four villas, all with access to the grand ballrooms, spa, pools, tennis courts, the boutique hotel service and the beach. The resort has been loved by the artistic and famous for more than a century. Goethe, George Sand and Lord Byron all stayed here, and Thomas Mann spent long periods here between 1912 and 1934, immortalising it in his book Death in Venice, later a Visconti film. Hollywood stars decided it was a place for partying. "It will bring in an influx of high-net-worth individuals, with their friends who may also become buyers," says Claire, handling sales for Knight Frank. Venice exerts such a global spell that it can be regarded as a buy-to-let location, says Paul Hudson. A diary of events brings people at different times of year - the Carnival in February, the Biennale in June, the Opera Festival in July, the Film Festival in September. "There is really no high or low season, just alto and altissimo!" he says.