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Houses in Milan: the demand exceeds the offer
09 July, Corriere della Sera
Fewer ads with the words “for sale”, more fliers in your mail or people ringing at your door offering you to evaluate your property. There’s a reason for what is happening in Milan: the house supply, especially for good-quality properties, is shrinking, while the demand is getting stronger and stronger. The numbers from the real estate agencies in Milan back up this version. Since the time series started in 2005, the year corresponding to 100, the demand has more than doubled, while the supply is stuck at 75.
The rest of the country follows the same trend of Milan. In fact, the latest survey created by the Revenue Agency together with Banca d’Italia and Tecnocasa shows how real estate agencies currently have fewer sale mandates, especially in cities with over 250 thousand people. Returning to Milan, the Fimaa president, Vincenzo Albanese, says: “Good quality dated properties now sell in a couple of months. Besides, the discount has returned to its normal parameters, 5-10%, due to the competing offers. Sales for new properties in the third ring of the city are doing also well, to the point that in some cases the prices have increased by 1-2%.
Construction on the outskirts of the city is also performing well, while the hinterland is still struggling to sell its unsold properties.
The trend
The main issue outside the city is making the offer, and the demand meet. Both are present, but the deal happens only after the seller had significantly lowered his/her expectations. In fact, the index following the values of the properties in the provinces is at its lowest, having decreased at 13.1 from 16.4% within a year. On the contrary, the outlook for the city is definitely positive, as the index is set at 140, having increased by 40% from the first part of 2017. Transactions are also expected to grow, even though the sales in the first quarter of 2017 in the city reported only a +0.9%.
The gap between supply and demand is even more dramatic when it comes to rentals. While rents and transactions are increasing, the real estate agencies have reported a 13% reduction of the offer, dropped to 25, whereas the demand remains high. Such a difference is less accentuated in the hinterland. Albanese explains: “The issue is that more and more property owners are focusing on short-term rentals. Hence, it has become more difficult to find a place for who is looking to rent for eight years”. Touristic rentals have boomed in the last few years and have recently gotten new impulse from the introduction of the regulations on the flat coupon. In Lombardy, however, the new law on CaV (holiday house) is coming up, implying a series of bureaucratic requirements which will inevitably lead to a series of appeals.
Fimaa also monitored the trend of non-residential properties. Concerning Milan, offices will grow further for the prime locations, while prices will increase only slightly. Concerning shops, prices and rents will remain unchanged. In the hinterland, both property types will see the prices decrease, and the rents increase.
Source: Corriere della Sera
Translator: Cristina Ambrosi