27 October, Milano Finanza
The residential market seems arrived at a turning point, while the non-residential segment is still. This is the outlook by Luca Dondi, Nomisma Ceo, whose observatory has been surveying the real estate market for over thirty years. Dondi comments: “our latest report confirms that the sector has continued recovering throughout 2018, even though the trend has slowed down lately due to the less favourable macroeconomic situation. The political decisions regarding credit are crucial for the country. The confirmation comes from the transactions backed by mortgages, which have set in the last few years at 55-60%. Moreover, we must not forget the positive impact of investments which represent at present 15.4% of the manifestations of interest, against 6.1% in 2017.
What is the outlook, especially for the residential sector?
The slowdown registered in the first months of 2018 in comparison with 2017 can be interpreted as a greater caution in the decisions. This is confirmed by the outlook showing a reduced expansion of the market compared with the previous forecasts. In the first six months of the year, the price variation was equal to -0.5% for new and dated properties. Only Milan, Naples and Bologna recorded a positive performance. It’s important to keep in mind one thing: the intent to purchase has gone from 2.2 million in 2017 to 2.6 million in 2018. It means that people want to own a house, firstly because they want to improve their living conditions, or they want to leave their family home.
Who is looking for a house?
It’s mainly families that are currently renting with an average monthly wage comprised between 1,800 and 2,400 euro. We must not forget though that there is part of the demand that is currently excluded from the market. It consists of 9.2 families that can’t access a mortgage loan.
Which are the weakest segment and the most promising one?
For what concerns the residential market, the diffused uncertainty hasn’t prevented the growth so far, while commercial properties have been impacted more by the crisis. The Italian real estate market is going at two different speeds. The residential segment has now got at a turning point. On the other hand, the non-residential market is still far from a positive trend. At a corporate level, however, there is a significant amount of investments, although not at the same level as last year.
Who is the driver for this sector?
Always the international investors, who represent 70% of the total investments. The lack of quality product is penalising the market. Quality, sustainability, product segmentation are the challenges players will have to deal with in order to satisfy a complex and rapidly-changing demand.
Source: Milano Finanza
Translator: Cristina Ambrosi