15 December, Secolo XIX
Transactions keep growing, and they’ve even accelerated in the last quarter. The figures from Omi (the real estate market observatory of the Revenue Agency) show a 6.7% growth of transactions between June and September 2018 compared to the same period of 2017. The increase is equal to 5.8% from the previous quarter. But not all that glitters is gold.
Shadows on the new year
Nomisma Ceo Luca Dondi explains: “We’re assisting at the aftermath of the recovery of the market that started in 2014 favoured by the convenient mortgage rates that made possible to purchase a large part of the stock. There is still stock available, but in October banks started being more cautious when issuing loans due to the spread variations and the economic uncertainties in the country”. The Revenue Agency reminds that about 80% of the transactions on the residential market are made through mortgage loans which represent 75% of the property value. It’s clear that if banks start restricting the issuance of funding, or if the interest rates grow, transactions will considerably decrease.
Moreover, Omi stresses how in the Eurozone the average property prices have grown by 4.3%, while in Italy they have decreased by 0.2% on average. It’s interesting to note that whereas the values for new constructions have been growing (+1.6%), the average prices for dated properties have decreased by 0.7%. Dondi continues: “The price trend reflects the consistent lack of investors as well as of buyers of main residences. If the current trend continues, the recovery will never happen. Considering the current economic situation, it’s hard to tell whether and when it will happen”.
Different results in the north-west
Genoa and Turin reported a remarkable increase of transactions. Genoa shows the predominance of big apartments: over 55% of the houses bought is bigger than 85 Sq m, and 23% is bigger than 115 Sq m. Genoa has the national record of very big houses (over 145 Sq m), representing nearly 10% of the assets transacted, with a 17.2% increase in the third quarter from the same period in 2017. It’s not by chance: large houses have seen the sharpest fall in value. The same budget needed or a 90-Sq m property a couple of years ago can now buy a 120 Sq m property. Another element is the composition of the real estate assets (which includes many large properties) and the population decline which explains the wide offer. These factors reflect on prices which continue decreasing, even though at a slower pace.
On the other hand, Turin reported the opposite trend: here, the preference is for medium or small houses. This is related to the active rental market, as the city attracts university students and tourists, which foster the short-term segment. Milan recorded a slight contraction, but it’s the only city in Italy where prices have significantly grown thanks to the recent real estate investments and its very dynamic economy.
Source: Secolo XIX
Translator: Cristina Ambrosi