07 July, Milano Finanza
The property market has improved. We’re finally witnessing a countertrend and prices seem to grow again, although not everywhere. As reported by the latest survey by Idealista.it, Milan also closed the second quarter with a positive price trend. The growth doesn’t concern only prime locations, as nine over the 17 city districts have reported positive performances. The situation is weak everywhere else. According to the portal, however, the average prices throughout Italy stabilised in May. Hence, they finally stopped their fall, which is the first step towards the right direction. The long recovery after the crisis has ended, and the market has almost healed. What is missing now is the full recovery of transactions, which were halved compared to the peak registered in 2008, but these also are recovering, and the latest figures are comforting.
After all, a misalignment between the two trends is physiological. Prices, in fact, generally follow the transactions trend with some years delay, regarding positive as well as negative trends, although this time the delay has been quite long since transactions recovered in 2014. In any case, we must not forget that there have been several factors that slowed down the recovery not depending on the property market. Firstly, there is the lack of inflation, the main driver for real estate and the price growth, along with the full recovery of the economy and the employment, as well as the structural uncertainty of Italian politics. As we can see, the situation is complicated, especially concerning prices. The conditions of the other segments are positive, such as offices, warehouses and industrial properties.
According to the Real Estate Observatory of the Revenue Agency, big cities slightly slowed down their growth in the first quarter of the year, while non-provincial capitals accelerated. The residential market grew by 4.3% compared to the same period of 2017 for the 12th time in a row (three years). Industrial and commercial properties too reported a positive performance, even though offices have slowed down after the acceleration of last year. For what concern houses, the market registered between January and March 127,277 transactions, increasing by 4.3% increase from the previous year. The growth has been going on since 2014, as the gradual absorption of the losses due to the collapse of transactions in 2012 still continues. The trend regarding the average surface of the transacted properties is stable, which is equal to 105 Sq m. As already mentioned, transactions increased more in the non-provincial capitals (+5.5%), while provincial capitals registered only a +2.3%. Among the big cities, Naples has recorded the biggest increase (+11.8%), growing for the 15th time in a row. The other cities are slower: Turin grew by 3.9% from the last year, Milan stopped at 0.9%, while Palermo is increasing again (+1.7%), after having decreased in the previous quarter. The trend has been negative in Genoa (-3%), Florence (-1.1%), while Bologna continues to drop (-2.7%). After having registered in the previous quarter a -1.3%, Rome has further decreased (-1.9%), but it still remains the biggest property market with 7,077 transactions during the quarter, followed by Milan (5,496) and Turin (3,095).
For what concerns the transactions in the two biggest cities, Idealista.it reports that in Milan the average property price is 3,374 euro/Sq m; while in the rest of Lombardy, 7 of the 12 survey cities are following the growth, with a 0.8% increase for the whole region.
Prices are still reducing in Rome, further decreasing by 0.8% and setting at 3,153 euro/Sq m. At a regional level, prices in Lazio have increased by 0.5%. “The negative trend of property prices is gradually absorbing, and the number of Italian regions reporting a positive trend is increasing”, concludes Idealista.it. There are currently 10 of them: Friuli Venezia Giulia (2.9%), Abruzzo (1.4%) and Sardinia (1.4%).
Source: Milano Finanza
Translator: Cristina Ambrosi