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The interest of foreign investors for Italian real estate has decreased

24 July, La Stampa

Foreign investors have still a positive sentiment towards Italy, with purchases for over 2 billion euro in the first part of the year. However, the trend has seen a reduction of the expenditures by 48.2% compared to the same period of the previous year. The numbers come from the report by Scenari Immobiliari presented today in Milan. This reduction doesn’t mean that foreign capitals are leaving the country, it’s instead a physiological decrease after an excellent year such as 2017. According to Scenari Immobiliari, another reason is the scarcity of quality product on the market.

International investors have mainly bought offices in Italy (two-thirds of the total investments) and commercial properties. An emerging trend sees Rome as a new marketplace, where to find prime properties to turn into hotels. Investors, however, are quite cautious in the research, especially the extra-European ones, due to the increased political risk.

According to Scenari Immobiliari, it’s because of this uncertainty that prices for offices have decreased in the first half of 2018, reporting a -0.5% from the end of 2017. The outlook is for a negative performance until the end of the year. Rents are also dropping, with the only exception of business districts. The data were presented today during the presentation 26th edition of the forum organised by Scenari Immobiliari that will take place in S. Margherita Ligure on 14th and 15th September.

In the meanwhile, the numbers confirm the excellent shape of Italian real estate, although investors and families have been more cautious in the first semester compared to the same period of the previous year. The uncertainties related to the future fiscal and occupational policies are holding back the market, which is also restrained by the lack of quality product for residential (dropped by 10%) and non-residential properties, especially in the big cities.

Commercial properties are in better conditions, mainly shops and high street, which drive the rise of prices. In the first part of 2018, prices for the retail segment reported a positive result for the first time since 2007, having grown by 0.2% from the second quarter of 2017. This growth is meant to consolidate, and it’s expected to reach 0.5% by the end of the year. Moreover, Istat assessed that consumptions by families have increased in the last few months.

“The trends of real estate market and finance are becoming more and more alike – commented Mario Breglia, Scenari Immobiliari president. – In fact, we’re going through a period of uncertainty concerning fiscal policies and real estate issue which is preventing investors and families from purchasing. It would be ideal to give a clear message about what politician are intending to do with this sector, being the fifth economic pillar of the country”.

Source: La Stampa

Translator: Cristina Ambrosi

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