29 September 2017 – Il Sole 24 Ore
The economic recovery, which is taking longer in Italy compared to the other European countries, and the recent political stability have widespread some optimism in the real estate market. The slight recovery of occupation (+0.6%) and the return of consumption, even if moderately, make hope for a better future.
In an ever-changing Milan, destined for international success, the demand from abroad is remarkable and it aims at exclusive areas such as Brera, Quadrilatero, Magenta, Duse, and San Babila.
According to its survey about luxury, Engel & Völkers shows how the demand concentrates in the western part of the city centre, in the area around Corso Magenta, Via Monti, Via Pagano, Via Buonarroti, the fast-growing areas between Corso Indipendenza and Piazzale Dateo. In the east, we find the monumental buildings of via Tortona, via Solari and Via Foppa. The west of the city is expanding too, thanks to the new metro line.
The purchase demand represents 63% of the market. The 15% of the customers, both national and international, are interested in buying to invest. Not only, in the last months, Milan has reported a positive trend thanks to Brexit. In fact, many professionals from London have started looking at, and buying too, luxury properties planning to move there in the future. They are mostly large-sized properties, over 250 thousand sq m, and centrally located. Some have also evaluated a more modest investment, like two- and three-rooms apartments, with the intention of moving later in a bigger house with the family.
According to Engel& Völkers, the availability of new luxury buildings doesn’t exceed 15% of the total, while the renovated properties represent 25% of the market, and those to be renovated the 60%. According to the figures, in 2017 the prices for luxury properties have stayed quite stable on a yearly basis, while for new properties in the best locations prices have reached record levels of 10-15 thousand euro/sq m. The values for old houses in good conditions in excellent locations are in a range between 6,500/8,500 euro/sq m. However, there are some characteristics that can increase the price. The central position or the luxury of the property can make the price or rent spike by 20%, 10% more for a balcony or a terrace, while the increase in price for a parking space is more contained (5%), even though having a place where to park makes a lot of difference in the city.
Rentals are steady in a range of 300-400 euro/sq m per year for renovated houses, while for old properties immediately available and in good location prices vary between 200-260 euro/sq m per year. The average discount applied to the initial price is about 8% in all the locations. Requests have increased in Rome.
For new houses (not in the old town,) prices vary from 5,000 to 8,000 euro/sq m, 4,600/6,000 euro/sq m for houses to be renovated. Rentals for renovated houses in a good location are in a range between 270 and 330 euro/sq m per year, while for old houses in good conditions and well-located prices vary between 240 and 280 euro/sq m per year.
Rome is a good market to invest as the seasonality here is of 12 months.
In the last two years, the highest prices registered for a well-located property have been equal to 9,500 thousand euro per sq m and 300 euro/sq m per year for rents.
Source: Il Sole 24 Ore
Translator: Cristina Ambrosi