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The property market is in good shape: offer +0.9% and prices are rising

26 September, Il Giornale

The numbers of the market of prime properties are relieving. Roberto Magaglio, License Partner for Engel & Völkers in Milan, confirms this view: “the market is in good shape. After so many years, we’ve finally arrived at a breakthrough”. As Luca Dondi, Nomisma Ceo, explains, “In Milan, despite all the adverse external conditions, transactions have grown, the demand has increased by 4-5 times. This is an element that supports the positive perspectives for the future”.

The 2018 Market Report by Engel & Völkers presented yesterday in Milan shows a progressive growth of the demand and the dynamic trend of the offer: +0.9% from 2017, meaning 5,496 transactions more. The growth concerns all the urban areas, not only the city centre and the upscale neighbourhoods, which registered a concentration of Chinese investors and “Brexiters”. In the first part of the year, the price range for renovated properties was comprised between 7 and 12 thousand euro/Sq m, falling to 6-9 thousand euro/Sq m for properties to be renewed.

Concerning the location and quality criteria, Magaglio highlighted that the whole sector went through some major changes. When both factors, good location and good quality, are present, prices tend to be higher. Moreover, there has been an increase in purchases for investment by private and institutional investors. Private investors are mainly represented by wealthy families from southern Italy that buy a house for prestige or for the sons moving to the city to study, as well as foreigners attracted by the 100-thousand-euro flat tax.

If the 2013-2014 period reported negative results, now the figures are more reassuring. The rental market is also optimistic. Marco Sorbara, Engel & Völkers commercial director in Milan, added that “the rental market for prime properties showed positive results, and there are solid bases for a breakthrough”.  As with the property purchases, also rentals are driven by foreign tenants and clients from southern Italy. The main factor is the confirmed trust in real estate investments and the economic stability of a qualified and efficient demand.

As a result, one of the requirements when renting is the working distance. The duration of rents has reduced. Sorbara adds: “People are not looking to rent for 4+4-year solutions, the maximum duration is 18-36 months. The demand for rentals by the month or the week has grown, thanks to all the temporary clients coming to Milan to attend events”.

Source: Il Giornale

Translator: Cristina Ambrosi