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Milan: rents spiked in Lorenteggio, Certosa and Bocconi

08 October, Il Giornale

The demand is growing, the offer is reducing, and prices are to the roof. Milan’s rental market risks to explode. Yesterday Mayor Beppe Sala met with City Councillor for Housing Gabriele Rabaiotti and the real estate operators to study the way to invert the trend. The numbers are taken from the portal Idealista. Prices have consistently been growing since Expo. The last quarter reported a 3.4% increase, while the yearly variation is equal to 5.8% (compared to September 2017). Five neighbourhoods have even registered a double-digit growth: Lorenteggio/Bande Nere (+14.2% in one, year, average prices have grown from 13.2 to 15 euro/Sq m), the old town (+11% and 22.4 euro euro/Sq m), Certosa (+10.3%), Navigli/Bocconi (+10.2%) and Cermenate/Missaglia (10.1%). The average price in the city is 18 euro/Sq m, the highest in Italy. It means that a one-bedroom apartment in a semi-central location costs 1,170 euro, 897 in Lorenteggio. In Corvetto-Rogoredo, the cheapest and one of the three neighbourhoods reporting a negative performance in the last quarter (-2% and 14.3 euro/Sq m), still costs 910 euro. The other two areas that are going down are Vigentino-Ripamonti (-1%) and Forlanini (-0.9%).

What is the situation in the rest of the country? In Naples, prices go up to 10.9 euro/Sq m. Bologna, thanks to university students and tourists as well as some big companies that relocated to the city, the average price is 12.4 euro/Sq m. Rome is still struggling, after a slight recovery in the last quarter, and the average price doesn’t go beyond 13.5 euro/Sq m. A 65 Sq m apartment in Rome costs 877 euro, nearly 300 euro less than Milan. Vincenzo de Tommaso from Idealista.it confirms that the Milan market is going through a very dynamic phase. The portal recorded in the last quarter an 80% increase in the inquiries and, at the same time, a 10% decrease in the accommodation for rent, resulting in a spike of prices. He stresses that this is a warning signal: “if the average per capita income is 21 thousand euro net, it means that rent takes more than half of it. In addition, Airbnb takes away from the market many properties from which local might benefit, but we’re talking about the central areas in this case”. He highlights instead what really causes the reduction of the offer is the regulation concerning the rental market, as many landlords prefer not to let their properties rather than having to deal with insolvent tenants. Finally, the Milan market is very active, besides businesspeople among the tenants, there are also people leaving their house to move somewhere better, or people moving after they lose the job,  get promoted, or after the sons leave home.

The Milan population is estimated to reach 1.5 million in 6-7 years, with an increase of students and elderly. Sala invites the operators of the sector “to work together. We’re going towards a housing shortage. Give us a suggestion on how to cover the gap of affordable rentals. Young people don’t dream anymore of owning a house. Due to the uncertainty of jobs, they prefer to rent. I want to work on social housing to make it more flexible. According to the figures, tenants live in social houses for 30 years at the moment. We want to facilitate the construction of affordable accommodations despite the restrictions of the territorial zoning plan”. Rabaiotti admits that the only result was reported by “convincing landlords to convert the open-market contracts in regulated contracts, which reduced prices by 20-25%, with tax benefit filling the gap. We’re currently unable to rent unlet properties under a regulated contract. We need more incentives, such as a discount on Imu and Tari”.

Source: Il Giornale

Translator: Cristina Ambrosi