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The race to real estate: the rise of luxury houses

06 November, Il Giornale

How is real estate market in Milan doing? Are prices rising? And what are the houses that sell or rent better? People from Milan have been asking themselves these questions for many years after house prices dropped following a decade of steady growth.

Now that the GDP has started growing again, are there finally encouraging signs? An accurate report was written by the Centro Studi Nomisma together with Santandrea Luxury Houses, the real estate agency of Gabetti group specialised in luxury properties, gives some answers.

In fact, the report (which focuses on Rome and Milan) provides some answers, especially for what concerns the luxury sector, namely the houses located in the most upscale areas. Concerning Milan, a detailed map of the property market in the five most popular real estate neighbourhoods is revealed: Quadrilatero, Palestro-Duse, Brera, Old Town and Magenta-Pagano-Castello. Prices (for sale and lease), buying and selling trends, strengths and weaknesses: the report unveils many details and it does so by using tangible data such as the transactions concluded during the first half of the year.

The project, guided by Santandrea Ceo Fabio Guglielmi, is a great source of information, featuring the contribution of Gabetti research department responsible, Francesca Fantuzzi, Gianluigi Chiaro di Nomisma and, for the part concerning Milan, Claudio Casali, RE private manager Milan and Turin of Santandrea.

The market

In mid-2017, the demand for luxury properties in Milan appears to be stable compared to last year, although the number of closed deals is rising, especially in the city centre, Brera and Magenta. The selling times average 5-6 months, the average discount between the demand and the effective price is diminishing, from 12 to 11.2%, prices are subject to a light drop: -0.5%. Concerning leases, the rents have stopped their fall (-0.3%) with an average discount of 8.4%.

The areas

Magenta-Pagano is the most requested, followed by the city centre. With the only exception for Palestro-Duse, Quadrilatero is declining; here the gap between supply and demand tends to widen. Concerning the offer, all the areas except for Palestro are increasing. The prices: in Quadrilatero, the city centre and Brera they haven’t decreased, while in Magenta and Palestro they’ve additionally dropped. Concerning leases, the city centre, Magenta and Palestro are stable; Brera is growing and Quadrilatero is declining.

Prices

The streets around Montenapoleone are still the most expensive, with peaks of 13,000 €/Sq m; Brera and Palestro are aligned (around 10,000) for new or refurbished houses, Palestro does better with old properties (8,500 versus 7,000); followed by Magenta and the city centre with a minimum of 5,500-6,000 for old or to be refurbished properties to a maximum of 8,500 for new properties.

The most sought-after house

In Milan, the most sought-after luxury property, based on the already concluded transactions, is in Brera and Magenta. The dimensions are between 150 and 200 Sq m, with 3 bedrooms, it’s new or refurbished and it features a terrace and a garage or a parking place. Concerning rent, the size reduces to 80 Sq m: a single room is enough, better if tastefully furnished.

Preferred features

There are some features which are increasingly requested by customers addressing to the luxury segment and that make a house more appealing and more marketable: the location on a high floor, a terrace, two living rooms, three bathrooms. Followed by: reception or surveillance, three living rooms and a garage (or a parking spot), which is no longer an essential requirement.

What is hard to sell

The “flaws” that can have an – also drastic – impact on prices and selling times are position on the first floor or on raised ground floor, the lack of at least one balcony, and the proximity to noise sources (nightlife, from this point of view, is an element which is increasingly taken into account).

What will happen in 2018

The Santandrea-Nomisma team forecast some trends. The outlook for Milan for the next months is a stable demand for luxury properties, counterbalanced by an increased offer. Prices are not expected to increase, although an increase of transactions, with stable prices and quicker times, is likely. Finally, concerning rents, the offer along with the demand is expected to increase.

Source: Il Giornale

Translator: Cristina Ambrosi

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