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Short-term rents, endless boom
21 October, Milano Finanza
The growing sectors relaunch the second house market
The growth of short-term leases seems to not stop. The numbers have been rising for the past three years, reporting +35% growth in the first part of 2017 compared to the same period of the previous year. The survey by the Halldis Observatory gives a better view of the situation, the company operates in short-term rentals of properties on behalf of homeowners for touristic and work purposes. Within a year, since June 2016, considering short-term rentals with a duration below 30 days and those of more than one month, it turns out that Venice is the most expensive, followed by Florence, Bologna, Milan, and Rome. Prices in Venice have risen almost by 30% and by 9.3% in big cities such as Milan.
Mountain is the favourite
The survey confirms that the sector is booming, and we are assisting at the comeback of the market of second houses, after a period of not much activity. In Italy, there are about 34.4 million properties, 13 million of which are available to be rented. Rentals concern more than 500 thousand properties. The Real Estate Observatory for touristic properties stresses how compared to 2015, the transactions in Italy have increased by 20,2%. A very interesting result, if we consider that only one year ago the growth was at +7% with a total growth of the residential segment of 18,8%, according to the Revenue Agency. More specifically, according to Nomisma, beach destinations reported a +19.9%, mountain +23.5%, and lake +15.2%. The average price to purchase a second house for holiday purposes is set around 2,229 euro per Sq m. With not so much surprises, for what concerns purchasing: Margherita Ligure is still the most expensive with 13,600 euro per Sq m. For rentals, instead, the prices are more homogeneous. The average rent price requested for June and August has increased by 0.4% on a yearly basis, with variations between -0.6% and +1.5%.
Tailor-made offers
The market is becoming very attractive and the operators are acting fast to get the best positions. One example is SoloAffitti, a real estate franchising with 350 agencies in Italy. Now, it has launched Solo Affitti Brevi, a tailor-made product to meet the needs of the growing demand in rents below 30 days, in order to provide a solution to whom looks for a house to always feel at home. “We want to take advantage of a market that might generate a turnover for 27 million euro”, says Silvia Spronelli, president of SoloAffitti, “with 135 thousand bookings and 335,500 people to accommodate in this type of rented properties. The demand on rents for less than one month is increasing, with a global turnover of +30%”. There aren’t only holidaymakers to move the market, says the expert, there is also who moves for work and has specific needs like assisting a patient, visiting relatives, attending courses and needs to stay in a city for a couple of days. “The initiative is born to offer landlords new business opportunities”, stresses Spronelli. “It’s a way to get an income from an investment or an inherited property, getting good earnings out of it without much hassle”. SoloAffitti has three business lines: up to 5 properties (micro business) for an estimated turnover of 72 thousand euro, up to 25 properties (medium business) with a turnover of 365 thousand euro, an over 25 managed properties (maxi business) where, Spronelli comments, “the profit opportunities for the real estate agent are definitely attractive”.
The B&B phenomenon
Investing in a second house, often to turn it into a bed and breakfast, is doing very well in cities like Florence, to the point that the demand on residential leases had to move from the old town in favour of other parts of the city. In Naples, the demand for properties for investment purposes has gone in the last three years from 28% to 41%. In Rome, the boom of B&B caused the prices to spike even further: in Piazza del Popolo and in Via del Babuino, the average prices are 8,000-9,000 Sq m, while Piazza di Spagna registers 15 thousand euro. This intense activity in the sector led the Revenue Agency to publish a set of instructions to regulate short-term rentals, the so-called Airbnb law. The regulation, among the other things, gives instructions on the terms for the new contracts, on the parties involved, on tax liabilities and the modalities publication of contracts, as well as the sanctions in case of breach of contract terms.
Source: Milano Finanza
Translator: Cristina Ambrosi