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Genoa, the boom is already over. And house prices continue to fall

06 December, Il Secolo XIX

The good trend is already gone, or almost: the property market has stopped, after 24 months of continuous growth. A sign that what was possible to achieve has been achieved, the future is uncertain. The thing is, in Genoa, without a solid project and a promotion plan to make the city more attractive, there will be little results going forward. The figures from the Revenue Office picture a city that is stuck. The city reports a negative trend in property sales in the third quarter of 2017 compared to the same period of 2016.

Too many houses and too little money

“We have too many houses and few buyers with little money”. Eugenio Del Gaizo, real estate agent and Fiaip representative (the association for professional real estate agents), explains briefly what is happening, the trend was already announced, but it was thought that it would have been compensated by a rise of prices. Nothing of this: in Genoa, houses are still selling, but less than before, despite the affordable mortgages and the lowest prices ever. “We live in a city designed in the 60es, during the industrial and economic boom, when the city needed a million people to go to work in the factories and in the contractions sites. We achieved that in the 70es, today we’re 580 thousand people with a big elderly population”. Hence, the areas that sell well are San Fruttuoso, Marassi, all the areas around the old tow s of Ponente e and Valpocevera. “It’s obvious that a house in Quinto will sell, but this is not relevant – explains Del Gaizo – what is lacking is the demand for houses in popular areas, which is progressively reducing”.

Mortgages and rents

The mortgages to buy the first house have seen increasingly lower interests. Banks require very strict guarantees, and nowadays knowing the right person doesn’t help anymore. In Genoa, the demographic categories haven’t changed, and the market is closing. Young people prefer to rent, the market here is steady, even though not thriving, thanks also to the boom of rentals for touristic use, with the idea in mind to go somewhere else, in Italy or in Europe, rather than buying a house and staying in the city. Young people want to travel, take challenges, they want to move easily to another city or country, continues Del Gaizo – if they want to stay here, they’re right to find something at acceptable prices, without spending most of their salary. They’d rather go away”.

Prices are dropping

“I’m not surprised that prices are falling – says Filippo Delle Piane, from Genoa, vice-president for the constructors’ association Ance – what surprises me is that in Genoa, even in the most beautiful parts, the prices per Sq m are still falling. This is becoming a structural problem”. If Milan, Rome, some areas of Turin and some cities in the South are seeing their prices rising again, after ten years of recession, in Genoa this hasn’t happened. “The difference with the big cities is perhaps that Genoa hasn’t renewed its real estate offer. It’s difficult to confer the idea that not only the area but also the type of property impacts the price”. There are also other penalising factors: too big houses that cannot be divided (these properties have seen a 20% fall in sales) and too high taxation for the most prestigious properties.

Source: Il Secolo XIX

Translator: Cristina Ambrosi

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