The boom of Lombardy

16 December, Milano Finanza

Not only Milan. From Bergamo to Varese, Mantua to Como, the real estate market of Lombardy doesn’t know crisis. The numbers are clear. This year, one-quarter of the transactions in Italy has concerned properties in the region, 12.8% more compared to the previous year. The preference of people of Lombardy for owning a house doesn’t seem a temporary trend, according to the analysis by Scenari Immobiliari, whose outlook sees more transactions coming up in the next three years, with sales reaching 200 thousand euro, the double of the current 123 thousand. The higher than average incomes are the main factor to support this growth (25 thousand euro against the national average of 20.690 euro). In addition, it’s an attractive market for foreign investors, not only Milan but also the minor cities, the lakes and mountain destinations. If it’s true, in fact, that one person every three in Lombardy has applied for a loan, 27.1% of these concerns a fixed rate mortgage. “Lombardy is the wealthiest region of Italy, and its real estate market is one of the biggest at European level”, stresses Mario Breglia, president of Scenari Immobiliari. “Here, 80% of the international investments in Italy is concentrated, and 65% of the domestic ones. We’re going through a very positive phase of the market that is likely to last till 2020”. There are plenty of projects supporting this growth. “In the whole region, there are currently initiatives for a total surface of 8.5 million Sq m and nearly 18 billion euro”, continues Breglia, “almost a half of the Italian real estate projects, making of Milan the main driver for innovation in Italy”. In the meanwhile, the first visible effect is the renewed du=dynamism of the property market of Lombardy for what concerns prices. According to the outlook of Scenari Immobiliari, in fact, prices for houses in the region are expected to grow by 1.3% in 2018, one percentage point more than the national average. And it seems that this trend will continue also in the next years. At least till 2020, when the growth rate of 2% will be surpassed, exceeding the levels of 2007. The Metropolitan City of Milan is the main driver. But the real news will be the other cities of Lombardy. “The economic recovery and the new real estate developments in the metropolitan city of Milan will give a new impulse to transactions”, says the experts of Scenari Immobilairi. “Sales in 2017 will exceed 33 thousand units, 4.2% more than 2016, reaching 35 thousand next year. While prices in the central areas will continue growing (+1.8% in 2017), the semi-central areas will go through a transformation process, with values rising by 2% this year and by 3% in 2018”.

The remainder the region is also doing very well. In Bergamo, the transactions have had a consistent positive trend since 2014, reaching 1,520 sales in 2016, and it will continue this way also for the next years. In fact, the survey by Scenari Immobiliari talks about an increase in sales by 9.2% by the end of 2017, with 1,700 units that will become 2,000 by 2019. Concerning prices, “in 2017 the average prices for houses in central parts of Bergamo have risen by 2% compared to the previous year and it will grow at the same rate also in 2018”, explains Breglia. “The area has shown in the last 10 years a good resilience, with a decrease of only 6.7%”. The semi-central areas of the city are a little weaker than the central ones, having reported a price increase of only 1.2%, with a value loss of 21.6% in the last 10 years. Whereas in the suburbs, house prices have continued to fall by 2.8% (-32% from 2007). But the new year will bring more stability.

The situation is very similar in Brescia: the transactions have been 2.670 in 2017, +11.2% compared to the previous year. The price trend is instead negative: a 1% decrease in the central neighbourhoods, but a countertrend is expected for next year, with an increase of 2%. Whereas the house prices in semi-central areas and suburbs are still negative, registering this year a contraction of respectively 1% and 2%. Good news for 2018, when prices are supposed to return growing by approximately 1% in both areas.

While Como is living an actual boom of real estate, with the benefit of foreign investments. Throughout the year the number of transactions has increased by over 13%, more than 1,200 properties and the trend will continue also in 2018. In fact, Scenari Immobiliari estimates a growth of transactions of 13.8%, reaching 1,400 units. “The turnover is close to the volumes of 2010”, says the experts of Scenari Immobiliari. “In 2017, there have been transactions for a value of 270 million euro and 2018 they will reach 302 million euro, 11.8% more in just one year”. In Como, prices in the central and semi-central areas have restarted growing again of over one percentage point in 2017, while the suburbs have registered a fall of 2.2%. “We’re expecting for next year increases for 2.8% in the city centre and for 1.7% in the semi-central areas”, say the experts. “However, we’re not seeing yet the return to the pre-crisis levels of 2007, with losses of 7.7% in the centre and for 24.6% in the suburbs”.

Pavia too is benefitting from this extremely positive moment that real estate in Lombardy is living, where house sales have already started recovering in 2016. By the end of the year, in fact, the transactions will increase by 8.6%, bringing the number of sales over the threshold of one thousand properties. In 2018 the market will grow further by 15%, exceeding 1,150 transactions. Mantua is also growing, in 2017 the city will have registered 650 operations against the 570 of the previous year, while the turnover has increased to 100 million euro with a positive variation of 11.8% compared to the previous year. “Prices in the city centre have restarted growing, as well those of the semi-central areas”, according to Scenari Immobiliari. “In the last 10 years, house prices in the suburbs have lost value of 38.9%, 4.3% only last year”. Losses in the city centre are more contained, registering a contraction of 21.2% in the last ten years. “We’re expecting for the end of the year increases for 1.9% of prices in the centre and for 1.4% in the semi-central areas”. The outlook of Scenari Immobiliari shows instead a consolidation of the recovery with prices rising by over 2% and a reduction in the fall of values in the suburban areas by -0.9%. The real estate boom of Lombardy has also concerned Varese. Here, sales have increased by over 13% and turnover for 11.5%. The transactions have exceeded 1,000 properties and they’ll rise to 1,150 in 2018. This trend meant a growth of house prices for over 1% in 2017, against a fall of 2.2% in the semi-central. “Over the next year, house prices in Varese will continue to grow in the centre while in the semi-central parts they will recover increasing by 0.9%”, concludes Breglia.

Source: Milano Finanza

Translator: Cristina Ambrosi

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