28 December, Blog Affitto
The 2018yearly report on the rental market by Solo Affitti confirms that rent prices in Italy have grown for the fourth year in a row.
A furnished apartment costs on average 604 euro, 3.1% more than in 2017. This the sign of the market’s great dynamism, as renting is becoming the Italians’ favourite housing solution.
Rent prices: the 2018 main market trends
Milan with 10.2% and Bologna with 10.9% are the main drivers of the rental market.
Rome too reported a significant increase equal to 7.7%. Venice grew by 6.1%. Rents grew also in Florence (+5.1%), Turin (+4.0%) and Palermo (+4.1%).
Cities of smaller dimensions also recorded good results: Potenza (+8.2%) is the most dynamic, followed by Ancona (+4.8%), Campobasso (+4.3%), Catanzaro (+4.0%), Trento (+3.2%) and Aosta (+2.8%).
Napoli and Perugia are stable, while Cagliari (-3.8%), Trieste (-5.4%), Bari (-6.9%) and Genoa (-8.4%) reported negative results.
Why are rents growing?
The rental market has been performing well in the past few years in Italy. It represents a market worth over 1.7 million leased contracts signed every year, resulting in a very dynamic sector.
The market grew between 2009 and 2014 when transactions were heavily impacted by the recession due to the restrictions on mortgages applied by banks. As a result, many families decided to rent due to their impossibility to buy a house.
The demand for rents has continued growing even now that transactions have resumed.
How is the demand changing?
The consistent demand for rents shows a new approach to housing. The house is no longer a possession to buy and where to live for the entire life, rather a property that needs to adjust to a more flexible lifestyle.
- Moving for work reasons has become increasingly frequent, it’s harder to stay in a place forever. Hence, renting is the best solution.
- Families are more changeable: they’re born, they transform and, sometimes, they split up more frequently than in the past, resulting in the need of moving houses and finding a place to rent temporarily.
- The increasing number of foreigners living in Italy: it’s rather natural for whom comes from abroad looking for a job to initially rent an apartment.
- Young people reach their economic stability later, forcing them to rent in order to move out the parents’ house before being able to buy a property
Thanks to all these factors, the demand has been consistently growing. More and more people need to rent, and institutions and property owners have to acknowledge this.
How is the offer changing?
The houses on offer, on the other hand, have slightly reduced. The large amount of properties available during the hardest phase of recession is gradually decreasing and returning to “normal” levels.
The offer on properties for rental shows two difference dynamics:
- The recovery of transactions is pushing landlords who had initially put for rent their properties as a temporary solution towards selling those properties now that the property market has restarted.
- There is great interest in short-term rentals. Many landlords who used to rent long-term chose short-term rentals, benefitting from the higher profits offered by this segment.
The combination of a high number of properties on offer and the growing demand for rentals will inevitably lead to the growth of prices. These have increased despite regulated apartments which are widespread throughout the country. Without this precious instrument, rents would be even higher.
Source: Blog Affitto
Translator: Cristina Ambrosi