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Bare ownership, boom of houses for sales in Genoa
25 February, Secolo XIX
The house, often the first and only asset, sold to have the money to keep going, or to help family members and relatives.
Bare ownership is a considerable phenomenon in Genoa. It’s not an accouraging fact since it confirms the economic struggle of the city, together with its consistent demographic decline.
Bare ownership is an agreement that allows elderly people to “pre-sale” their house at a discounted price. The buyer will become the owner of the property only after the death of the old owners, which cashed the money from the sale. According to Immobiliare.it, Genoa is the first city in Italy for numbers of houses offered as bare ownership. The data is confirmed also by the Revenue Agency report up to 2015. “People decide to monetize the house because they have no other alternative to support the household finances”, explains Luca Beltrametti, professor of Economy at the University of Genoa who has studied the phenomenon. “There is no strong economy capable of supporting youths and elderly, who are already suffering from the little pension money they get and are burdened by the necessity to help financially struggling sons, nephews and relatives”.
A vicious circle that reflects in the lack of economic opportunities in the city: “A countertrend is impossible without the rising of the average income and the increase of employed population – says Beltrametti – without considering that properties are valued well below the market values. There are sometimes cases where elderly people accept unfavourable offers without having the means to properly evaluate the situation. This is not fair.”
Actually, in Genoa, according to the figures registered on the portal, the average value of bare ownership is not much lower than the average market value, but we must take into account that Genoa, more than all the other big Italian cities, suffers from a consistent devaluation of house prices. There are too many empty houses due to the decrease in population and the lack of purchasing power or of interest in buying.
“The only solution is a radical change of the city economy – says Graziano Bortolai, owner of the homonym real estate agencies – I have three sons aged between 18 and 30 years that work with me, but I said them clearly that it would have been better for them to go working away. House prices continue to drop, and they’ll continue to do so. There are tens of thousands of empty houses, even immigrants can’t occupy them all”.
The phenomenon of bare ownership is also due to banks, rather than real estate agencies which have fewer requirements. “The ideal would be selling directly and move to another city – comments Matteo Montanari, Fiaip regional Secretary – but there are too many issues, one of this is that elderly people don’t want to leave the house where they have lived for all their lives. The property market in Genoa suffers from an excess of offer and a too scarce demand, from too big apartments often of low quality, heavily taxed and not in demand”.
The alternative to bare ownership would be the reverse mortgage, where property owners mortgage their houses with a bank obtaining a payment in exchange. Unlike bare ownership, if the conditions are respected, the property can be redeemed. This solution is not very frequently adopted in Italy, and there are not so many banks offering it.
Source: Secolo XIX
Translator: Cristina Ambrosi