29 November, Milano Finanza
The latest Nomisma survey shows that 2018 will close with an increase of transactions equal to 5.6%, while property prices will have further decreased (0.9% on average). The political uncertainty impacted the sector. And the boom of international investments registered in 2017 won’t repeat. Moreover, Airbnb had a strong influence on the rental market. “The slowdown of the economic growth along with the uncertainties originated by the conflict between the Italian Government and the European Union regarding the 2019 budget obviously reflected on the national property market. The trend that has been driving the activities in the sector since 2015 has weakened due to the recent events, although it’s still positive”, reads the 2018 Third Real Estate Observatory by Nomisma which was presented in Milan at the Cariplo conference centre. The reduction of the initial enthusiasm that fuelled several transactions and the stricter requirements to access credit are the two main factors that might deter the recovery of real estate, according to Nomisma.
The Bologna institute also reminded that the percentage of transactions funded by mortgage has gone from 43.8% to 59.8% in the span of few years, with loans amounting to 50 billion euro in total (they were slightly over 20 billion before). Nomisma remarked that “without significant corrections of the economic policies, the financial tensions risk to reduce the fuel that has driven the recovery of real estate up to now”. It’s not by chance that the changed scenario curbed the rise of the returns on real estate investments which reported an acceleration in 2018.
According to Nomisma, 2018 will close with an increase in the transactions (+5.6% for 572,752 properties) and a further decrease of property prices (-0.9%).
Source: Milano Finanza
Translator: Cristina Ambrosi