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Lombardy is the driver of Italian real estate

13 December, Il Sole 24 Ore

Milan is the only Italian city reporting a consistent growth of transactions from 2013 to June 2018. The third quarter of the year registered a 2.4% slowdown, according to the data from the Revenue Agency. Lombardy is the first Italian real estate market, concentrating 22.8% of the national residential transactions. “Compared to 2017, the transactions in the region further increased by 13.8% (nearly 5% more than the national average)”, reads the report by Scenari Immobiliari in collaboration with Casa.it. The number of transactions completed in Lombardy is expected to reach 140 thousand units by the end of the year, in comparison with the 123 thousand units reported in 2017, while the transactions at national level are 610 thousand (having grown by 8.9% from the previous year)”. Lombardy generates one-fifth of the GDP, as Scenari Immobiliari president Mario Breglia reminded, and the Po Valley regions put together make Russia’ s GDP.

Lombardy is the first region in terms of real estate projects: there are current projects worth 20 billion euro in total, compared to the 30 billion of Italy. Concerning transactions, said Breglia, the region reported the same number of sales of Portugal, and it’s getting close to the numbers of Poland, confirming to be a market apart from the rest of Italy. The outlook for 2019 for Lombardy and Italy is positive. Lombardy’s growth rate is supposed to exceed that of the whole country, as the gap with Italy is getting bigger. “Transactions in Lombardy should set at 158 thousand in 2019 – according to the report – and it will reach 180 thousand by 2020, surpassing the transaction record recorded in 2007. The outlook is influenced by the political and economic situation. The conflict with the EU might worsen the markets’ expectations and consequently damage families with negative effects on real estate too. Therefore, this outlook is valid only if the current situation stays the same”.

However, the year will close with positive results, despite some difficulties concerning institutional investments. Assoimmobiliare estimates that institutional investments will decrease by 30% from the previous year. Luca Guffanti from Ance Lombardia says that “We have to create the Milan brand to avoid the recession to become structural”.

What about prices?

The average selling prices in Lombardy in 2018 have returned to 95.8% of the nominal value recorded in 2007, registering a 1.2% growth from 2017. On the contrary, in Italy, the average prices continued to drop (even though at a slower pace), losing 0.1% of value from the previous year and setting at 83.9% of the values recorded in 2007. Prices in Italy are supposed to stop decreasing in 2019, while they’ll increase by 1.5% in Lombardy. In 2020 prices are expected to grow by 4.2%, whereas at national level they’ll rise by 1% from 2018, although they’ll remain below the pre-recession levels.

Milan continues to grow

Milan will reach 36 thousand transactions, registering an 8.4% increase from 2017. Its absorption rate has no equals in the country. “The turnaround of the stock is very quick here, namely 36 days against the 60 days of the rest of Italy”, says Casa.it Ceo Luca Rossetto. However, there are parts of the city where the turnaround is 100 days and others that are 26 days.

For the first time in ten years, the yearly growth of the turnover (+8.7%) grew quicker than the number of transactions, thanks to the consolidation of the growth of property prices in semi-central areas of the city. By the end of the year, the turnover for the residential segments will reach 10.6 billion, the best performance of the last decade.

The analysts that did the survey said that “Milan’s prime areas have consolidated. But investments and requalification projects have also concerned the semi-central areas”.

The price trend in the city centre of Milan has resumed growing. In 2015 the market reached the figures recorded in 2007, and prices per square metre have been continuously growing since then.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

 

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