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Santandrea: the luxury residential market grew in Rome and Milan

10 October, Re Quadro

The market of prime properties in Rome and Milan continued growing in the first six months of 2018. The picture emerges from the data disclosed by Santandrea and processed by the Gabetti research centre.

Transactions in Milan were particularly active, as the demand grew mainly in the old town, Brera and Magenta, while Quadrilatero and Palestro-Duse saw fewer activities. In Rome, the demand grew across all the areas except for Flaminio and Salario-Trieste. Despite the return of the interest of potential buyers, the offer is still limited except for the old town, where the number of sales increased, continuing the 2017 trend.

The average time to sell in Milan was estimated around five-six months, seven months for Rome, longer than the second quarter of 2017 (6.3). In Milan, the average discount was set at 13-14%. Prices remained substantially stable from the previous quarter in both cities. They slightly increased in Milan (+0.2%), especially in Brera, while Rome registered a slight reduction (-0.2%), mainly due to the Flaminio area.

The rentals for prime properties in Milan and Rome showed diverging trends. In Milan, the demand grew mainly in the old town and Brera, where available properties are plenty, resulting in an increasing number of closed sales. The situation is substantially stable in Rome in comparison with the second quarter of 2017. The demand registered no variations, except for a decrease in Salario-Trieste. The average time to rent a property had reduced in Milan as well as in Rome, setting slightly below three months for both. In Milan, the average discount between the requested rent price and the actual rent price was around 9-10%, while in Rome the discount was 7-8%. Finally, the average rent prices continued to decrease both in Rome (-0.6%) and Milan (-1%).

The outlook for the second part of the year

In the second half of 2018, transactions will increase in Rome and Milan, with prices remaining substantially stable. Concerning rentals, these will grow in Milan, supported by the demand. On the contrary, the rental market in Rome will be stable, and rent prices will decrease.

“The luxury property market follows different dynamics from the traditional market”, explains Fabio Guglielmi, Santandrea Luxury Houses Ceo. “A luxury property isn’t only expensive, but it also offers valuable elements such as the location, the proximity to schools, shops, transportation, the safety of the neighbourhood. It’s a safe-haven asset. It caters to clients looking for a place that can express their personality and their high status. The typical buyer of luxury properties doesn’t buy only a property but also a story, a symbol, and a signature too if we think about Milan’s big architectural projects”.

Focus on Milan

In the first semester of 2018, transactions in Milan showed different trends depending on the area.

Brera was one of the most dynamic parts of the city, reporting a consistent growth. It’s followed by the old town and Magenta-Pagano-Castello, reporting a high level of demand. Palestro-Duse was less dynamic, while the demand in Quadrilatero was steady, due to the gap between sellers and buyers concerning the property value, resulting in a shift towards the rental market.

Concerning the offer, all the areas except Palestro-Duse showed an increased number of properties available, although the quality of the buildings matches the expectations of the buyers.

Quadrilatero is once again the most expensive neighbourhood, for sales and for rents. It’s followed by Palestro-Duse and Brera (between 8-9 thousand euro/Sq m). The cheapest houses are in Magenta-Pagano-Castello, 6 thousand euro/Sq m.

The demand for rentals in Milan was stable in Quadrilatero and Palestro-Duse, while it grew further in Magenta-Pagano-Castello, Brera and the old town. Properties for rent increased in the old town, Quadrilatero and Brera. On the overall, the market of short-rentals directly managed by the property owner or agencies grew further, while the offer for long- and medium-term rentals reduced throughout the years.

Focus on Rome

Concerning transactions in Rome, the demand grew in the last six months of 2018 in all the areas except for Flaminio and Salario-Trieste, where the market showed no variations. The offer was stable, with a further decrease in Trastevere and an increase in Prati and Salario-Trieste. The old town reported a good performance, confirming the positive trend of 2017 concerning the number of transactions.

There were still significant differences concerning prices due to the heterogeneity of the areas and the characteristics of the buildings. The old town continued to record the highest rates (10,500 euro/Sq m for new properties, 8,500 euro/Sq m for dated ones), followed by Aventino and Trastevere. In the other areas, rents’ average prices for new or renovated houses were comprised between 6,800 euro/Sq m in Prati and 5,100 euro/Sq m in Flaminio, while values for dated properties were more stable and set between 4,500 euro/Sq m in Parioli and 4,900 euro/Sq m in Prati.

Concerning the demand, the market in Rome was stable in the old town, Aventino, Prati, Trastevere, Parioli, Pinciano-Veneto, while Salario-Trieste further reduced. The offer for rentals saw the increase of available properties for rent in Parioli, while the availability decreased in the old town and showed no variations in the remaining areas. Lease contracts were unchanged in all the areas except for the old town and Salario-Trieste which registered a reduction. Rent prices were stable except for the reduction recorded in Salario-Trieste and Parioli.

Source: Re Quadro

Translator: Cristina Ambrosi