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The demand is too high in Milan. There will be no available houses in five years
05 October, La Stampa
Milan risks exploding. In the meanwhile, there are 200 thousand empty houses in Rome and 60 thousand in Turin, where the population keeps diminishing. In Milan, on the contrary, the demand is growing thanks to university students, researchers from the 11 universities in the city, expats returning from Brexit and many more. According to the latest report by Sigest, a company with a thirty-year experience in real estate, the sales will grow further to the point that there might not be any more houses left in five years.
The trend concerns new constructions as well as dated properties, sales as well as rentals. To make everything more complicated, we must add the rise of short-term rentals, as Mario Breglia from Scenari Immobiliari explains. “Airbnb is a very profitable business at the moment. As a result, rather than selling, people prefer to parcel their apartments and rent them”.
According to the Sigest survey, new construction registered a 32% sales increase from 2017, with 1,233 houses sold. 53% are houses that were put on the market last year, while 47% of the homes were placed in the market in the previous 12 months. Enzo Albanese, Sigest Ceo, comments: “Milan is a market growing at a different speed form the rest of the country, thanks to its urban transformation that improved the city, making it more attractive than other big cities. Considering how quickly the new properties are sold and the 4-5% growth rate of transactions, Milan risks not to be able to meet the demand in the next five years.
The average prices in the centre of Milan are around 10 thousand euro/Sq m, 8,600 euro/Sq m around the city walls, and 6,500 euro/Sq m in city ring road area and they dramatically decrease in the outskirts. The values reported by Sigest represent the prices requested by the 107 development project operating as of 1st June 2018. In comparison with 2017, the city centre has remained stable, while the city walls (+10%) and the ring road (+5%) have grown.
The main players on the market are insurance companies such as Generali, which is currently evaluating City Life, Unipol, which is building its skyscraper in Porta Nuova, De Agostini Capital, which has just bought Palazzo Aliverti in Via Broletto. There are also asset managers like Fabrica, Castello, Antirion and international funds such as Hines and Blackstone.
“Milan is incorporating the markets of the neighbouring cities – says Breglia. People from Pavia, Crema, Novara, and Piacenza are buying houses in Milan; while other cities such as Monza, Como, Bergamo and Brescia have preserved their autonomy, also because of the bad connection. Turin is defeated: people sleep there and goes to Milan to work and to enjoy the nightlife”.
Alessandro Ghisolfi from AbitareCo notes that “sales from new and dated houses have been growing for the last three years with peaks of even 20% and about 22 thousand houses a year. New construction absorbs a good part of the request, and the offer can’t keep up with the demand. This latter is composed of people with a budget up to 4 thousand euro/Sq m, up to 7 thousand euro/Sq m or between 7 and 12 thousand euro/Sq m. Milan has plenty of solutions for any budget, investments included”.
The market will grow further also in the next years. The only worry is “the political uncertainty”, as Alessandro Blap and Matteo Bonelli, partners of the legal firm Bonelli Erede, explain. “The properties placed on the market linked to non-performing loans should find enough buyers. In Milan, many private investors and funds are chasing only a few opportunities. They realised that Milan is Italy’s most touristic, liquid and least risky market”.
Source: La Stampa
Translator: Cristina Ambrosi