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residential Market News: Spanish Real Estate Intelligence

Property prices further decreased in the third quarter of 2018: -0.8%
10 January, Il Sole 24 Ore The property price trend continues being negative. The data regarding the third quarter of 2018 published by Istat has resized the weak positive signals registered in the previous period. In fact, prices for houses had continued decreasing from the April-June period, when they reported a slight recovery from the beginning of 2018. The reduction had been equal to 0.8%, and the same reduction had also been reported on yearly basis. As Istat reported, this is the seventh consecutive reduction. According to the preliminary estimation of the Ipab index, monitoring the prices of properties bought by families “for living and investment purposes, prices had decreased by 16.7% in comparison with the average registered in 2010. This plunge of values is mainly due to existing houses, whose prices fell by 22.9%, while new houses reported a 0.2% growth”. Istat notes that “also for the third quarter, the negative trend is to be attributed solely to the prices of existing houses, which registered a negative variation equal to -1.3% (it was -0.8% in the previous quarter). On the other hand, on a trend basis, prices for new houses had accelerated, having gone from +1.2% in the second quarter of 2018 to +1.4% in the third quarter. Whereas on a cyclical basis, the reduction is reported by both categories (-1% for existing houses and -0.2% for new ones)”. The variation rate for 2018 is equal to -0.5%. As Confedilizia president Giorgio Spaziani Testa wrote on a memo, “In the past year, prices of existing houses had further decreased by 1.3%. In addition to these figures, we must also consider the many properties with no real estate value since nobody wants to buy or rent them. Italians’ savings are being wasted, and politicians are turning on the other side. The new budget law even allows municipalities, for the first time in three years, to further increase the already ridiculous Imu and Tasi property taxes amounting to 21 billion euro yearly (for a total of 150 billion since 2012)”. Source: Il Sole 24 Ore Translator: Cristina Ambrosi
Slight recovery of real estate in Italy but prices haven’t increased yet
07 January, Il Sole 24 Ore The Italian property market is a steam locomotive, while the rest of Europe is a high-speed train. In the last seven years, many European countries had left recession behind and even reported a double-digit increase in house prices. It’s the case of Lisbon and Amsterdam. In Italy, property transactions have recovered, but prices are unchanged. The market is not homogeneous, as some cities have recovered while provinces are still struggling. Mario Breglia, president of Scenari Immobiliari, says: “Europe is about to decelerate its growth”. The party is almost over, and Italy didn’t even participate. He continues: “Transactions in Italy are 30% lower than the maximum levels, and prices continue falling, although slightly”. The average prices have dropped by 30-35% from the beginning of 2018. This negative trend has lasted for years, while in other countries in Europe such as Spain and Ireland, after having collapsed, had a remarkable recovery. However, the future looks positive. Italian real estate, in fact, is benefitting from the dynamic growth of the rental market which is driven by short-term rentals (one million of properties is on the market with this formula) and of some emerging segments such as student housing, where big international groups as Hines are active, and accommodations for young professionals (on a minor extent, assisted living too). These new niches have been giving a new impulse to the market. These factors encourage a cautious optimism for 2019. However, some elements are burdening the residential market. One of these is the fear for a significant stagnation of the economy, while the spread is less worrying than before. Concerning the beginning of the year, Nomisma forecasted 572 thousand transactions (+5.6%), aligned with the outlook of the Revenue, thanks to the positive trend registered in the past month. The milestone of 600 thousand transactions has been postponed to 2020. In 2019 price will continue growing, although slowly and moderately, as reported by Nomisma in November 2018 surveying the first 13 Italian cities. According to Nomisma, the biggest markets have already reached a breakthrough. Milan was the first to register the countertrend, as last year the city reported a rise in the average prices, both for the residential and the commercial sector. All the parameters suggest a further and consistent growth of the market which will also reflect on the construction sector. Concerning house prices, in 2019 Bologna and Florence will return to positive results (+0.2%), followed in 2020 by Venice, Rome and Naples, and finally Turin in 2021. The south of the country and the islands will continue registering negative performances for the whole three-year period along with Genoa and Padua in the north. Nomisma forecasts that in 2019 prices will register an average reduction of 0.5%, for then consolidating in 2020 (+0.1%), and finally registering a sharper growth in 2021 (+0.5%). According to Nomisma, prices will rise for new construction in the cities, with a more marked increase in the city centre (+1.85% for prime locations, +0.99% in the centre), while the growth will be more contained in the other areas (+0% in the semi-centre, +0.38% in the suburbs). As Istat has reported several times, the growth for dated properties is slower. They’re expected to grow in the central areas (+0.18% for prime locations, +0.45% in the centre), while they’ll continue to decrease in semi-central (-1.47%) and suburban areas (-0.44%). Source: Il Sole 24 Ore Translator: Cristina Ambrosi
Prices for dated properties continue decreasing
11 January, Milano Finanza The residential market is going at two different speeds concerning the price trend. While prices for new construction are increasing, the remainder of the property market is losing value. In the third quarter of 2018, the Ipab index, which monitors the prices of the houses bought by families for living or investment purposes, shows a 0,8% reduction if compared to the previous quarter (it was -0.4% in the second quarter of 2018) as well as from the same period of 2017. As reported by Istat, the negative trend of the Ipab index concerns only existing houses which decreased by 1.3% (it was -0.8% in the previous quarter). On the contrary, prices for new houses went from +1.2% in the second quarter of 2018 to +1.4% in the third quarter. This trend combines with the consistent growth of transactions, as these increased by 6.7% in the third quarter of 2018 as registered by Omi. In general, the decrease in the Ibap index is due to the prices of dated properties which decreased by 1%. Prices for new houses have also reduced from the second quarter, although in a more moderate way (-0.2%). Property prices in the first three quarters of 2018 have decreased by 0.6% from 2017, resulting from the negative performance of existing houses (representing over 80% of the total), which fell by 1%, and the positive performance of new houses, which grew by 1.2%. In comparison with the average values registered in 2010, the first year for which is the Ipab series are available, in the third quarter of 2018 prices decreased by 16.7% exclusively due to dated properties, whose prices dropped by 22.9%, while prices for new houses had generally increased, even though slightly (+0.2%). The rate of change reported by Ipab for 2018 is negative and equal to -0.5%. Source: Milano Finanza Translator: Cristina Ambrosi