Tag: house prices

Houses, transactions have slowed down

11 June, Il Sole 24 Ore

2018 has started with positive results concerning real estate transactions. It meant that houses continue to sell, more they did in the same period of last year. Hence, the trend started in 2014 is going on. However, the market has slowed down in the eight biggest cities of Italy.

Between January and March, 127,277 houses were sold, for a total surface of 13.4 million Sq m, +4.3% compared with the same period of 2017, but less in comparison with the +6.3% registered in the previous quarter. The market reported a positive performance for the 12th time in a row.

However, some areas have registered a negative sign, such as the central province capitals (-0.7%).

Smaller cities continue with the recovery: non-province capitals reported +5.5%, province capitals are stuck at 2.3%. In the last three months of 2017, the south registered the highest growth rate (+9.3% with a peak of 11.1% for medium-sized properties between 85 and 115 Sq m). In the first quarter of 2018, the islands registered the biggest growth, exceeding 6%, while the north and the south grew respectively by 5.8% and 5.5%.

Considering that the transactions concerned mostly first houses, both as a new purchase or as an upgrade of the current home, the most popular dimensions (one-third of the operations, equal to 39,855 houses) are comprised between 50 and 85 Sq m. The houses sold measuring between 85 and 115 Sq m were 34,996, while the houses measuring below 50 Sq m were only 11,741. This latter category consisted mainly of investments.

What about prices? They’re continuing to fall. In the last quarter of 2017, the values decreased by 0.3%, while nominal prices in the eurozone increased by 4.2%.

The slowdown of the main eight cities is surprising. They’ve been the least dynamic. Here, sales grew only by 0.7% (+3.4% in the fourth quarter of 2017). The scenario is very varied. In Naples, the property market is thriving, reporting an 11.8% growth, while in Turin was only 3.9%.

Milan is catching the breath (0.9%), after having grown for 19 consecutive quarters. But there were fewer houses sold in Genoa, Florence, Rome and Bologna.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Why are property prices not rising? Istat: -0.4% in 2017

21 May, Il Sole 24 Ore

Property prices in Italy have registered again a negative result on a yearly basis despite they slightly improved in the last months of 2017. In fact, Istat reported a 0.3% fall in the last quarter of 2017 compared to the same period of the previous year and a +0.1% compared to the third quarter (thanks to new construction). On the overall, prices dropped in 2017 by 0.4%.

The price increase is the missing piece for the recovery of real estate, which has recovered in terms of number of transactions already a couple of years ago. In fact, 2017 reported 543 thousand transactions. According to the operators of the sector, these numbers are close to the stabilisation (even though they’re far from the 2006 figures which are, however, an exception in the history of the sector).

The general negative trend of prices shows a substantial stagnation at a national level. This doesn’t mean that there aren’t exceptions and positive results, as reported by Milan and the most sought-after areas of the main cities. According to the latest figures from Immobiliare.it, prices increased by 0.3% in the first three months of 2018 in the provincial capitals with over 250 thousand inhabitants (smaller towns registered a 0.7% decrease). According to the portal, Venice, Florence and Bologna are leading the positive trend, while the performance is negative for southern Italy.

However, according to Eurostat, Italy is the only European country that hasn’t reported yet a countertrend of prices. Why?

Even analysts are wondering why. Many forecasted a recovery, even though a mild one. Apart from the various internal dynamics, there are at least four differences with the other European countries.

Firstly, GDP and occupation in Italy have grown less than in the other countries in the last few years. In addition, the country was impacted by the turbulence on the financial markets and by the weakness of the banking system, due to the bad debt originated from real estate. The lower purchasing power and the little trust, together with a long period of credit crunch, have weakened the demand, which is still mainly referred to the main dwelling and it can’t sustain the current prices.

Secondly, in Italy, there wasn’t a dramatic fall of prices as it happened abroad with the crisis of subprime loans, due to the traditional attachment of families to the house that brought property owners to not lower their expectations so easily. Therefore, the decrease was slower than elsewhere, even though it caused a value loss of over 25%, and the current recovery is equally slow. Furthermore, we must consider the level prices started from since they were skyrocketing before the crisis, making the stabilisation process longer.

Moreover, the supply in excess turned out to be more than expected, as it accumulated through the years through transactions at halved prices and it was fuelled by a taxation that pushed people to get rid of properties.  And we must also include the uncertainties of the assets connected to NPL that are still to be placed on the market.

Finally, with the introduction of Imu, we must take into account that taxation in Italy has grown considerably, with the inevitable decrease of prices.

Returning to the figures from Istat disclosed on 6th April, “in the fourth quarter of 2017, according to the initial estimate, the price index of properties purchased by families (Ipab), as a main dwelling or as an investment, increased by 0.1% compared to the previous quarter and decreased by 0.3% in comparison with the same period of 2016 (it was -0.8% in the third quarter)”.

This negative trend “is due to the decrease of prices for existing houses (-0.5% compared to the -1.3% of the previous quarter), while new construction decreased less (+0,5% in the third quarter)”.  On the overall, “the slight increase of Ipab is due solely to the prices of new houses (+0.7%), while those of existing properties remained stable”. On average, property prices in 2017 decreased by 0.4% compared to 2016 (when the variation with 2015 was equal to -0.8%).

Finally, Istat notes that, compared to 2010, “house prices in 2017 decreased by 15.1% (-1.4% for new houses, -20.5% for old ones)”. There are no reports by Istat before 2010, but prices had started dropping already at the time.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Property market in Palermo: +7.9% for 2017 transactions

16 April, Economia Sicilia

The city Palermo confirmed in 2017 the positive trend of its residential market, as shown by the Gabetti report. According to the analysis, the decrease of prices (-2.2% in the first quarter, -0.4% in the second) has given an impulse to the market. According to the Revenue Agency figures, transactions were 5,109 in 2017, +7.9% compared to 2016. Another very positive result that contributed to the dynamic market is given by the selling times that were set at 4.7 months on average in 2017. In the second part of 2017, the discounts granted were around 14% with variations depending on the specific qualities of each property. The old town has registered on average 2,000 euro/Sq m for renovated high-end properties, while cheaper properties in good conditions are set between 1,150 and 1,600 euro/Sqm. The highest prices have been reported in the old town: for the most exclusive houses, the price is around 2,400 euro/Sq m. These properties may deviate a lot from the average prices given here.

Always in the old town, the area of Kalsa has registered for prime properties in good conditions prices around 1,650 euro/Sq m and 1,300 euro/Sq m for old properties in good conditions. In Ballaro’ – Albergheria, prices are around 1,200 euro/Sq m for a property in good conditions. The offer is also good for what concerns cheaper solutions, with prices around 800-1,000 euro/Sq m for properties in good conditions. The city centre maintains its appeal with medium- and high-range prices. The highest prices were registered in the Politeama area, where a prime renovated property is valued around 1,800 euro/Sq m. Prices are slightly lower in the Liberta’ – Croci and Terrasanta – Cusmano areas, where prime properties in good conditions are set around 2,050 euro/Sq m for the former and 1,750-2,000 euro/Sq m for the latter. The areas of Liberta’ – Villabianca, Don Bosco, Matteotti, Magnolie, Stadio and Strasburgo are also attractive, with prices ranging from 1,750 and 2,000 euro/Sq m. Paterno’ – Palagonia and Leonardo da Vinci – Campolo have similar prices, around 1,800 euro/Sq m for medium-range properties in good conditions and up to 2,000-2,100 euro/Sq m for properties in excellent conditions. Prices are lower in Duca della Verdura, Michelangelo – Uditore and Leonardo da Vinci Alta. Concerning rentals, prices are set around 1,500 euro/Sq m for medium-range properties in good conditions. In the Noce – Parisio and Zisa areas, prices are around 1,200 euro/Sq m for the same type of properties.

Similar prices have been reported in the areas of Calatafimi – Indipendenza, Calatafimi Bassa – Villatasca, Universita’, Civico, Montegrappa – Civico, Policlinico – Oreto Vecchia and Villa a Mare – Foro Italico – Villa Giulia – Orto Botanico. Here, an old property in good conditions is valued between 1,000 and 1,400 euro/Sq m. Prices decrease towards the southern coastal area. In Messina Marine – Bandita, Messina Marine – Romagnolo, Brancaccio, Stazione – Corso dei Mille, Oreto Nuova and Falsomiele, prices for old properties in good conditions are set around 900-1,200 euro/Sq m. Prices are slightly higher in the northern coastal area. In Arenella, prime properties are valued between 1,2- and 1,700 euro/Sq m. The areas of Porto, Borgo Vecchio, Fiera – Cantieri and Montepellegrino have similar prices: between 1,200 and 1,500 euro/Sq m for an old property in good conditions. The northern coastal area is particularly attractive for what concerns high-end properties. Mondello – Viale Venere have the highest prices, with 2,600 euro/Sq m for exclusive houses in good conditions, while prices in the Mondello – Valdesi area are set around 2,400 euro/Sq m. Capo Gallo follows with prices between 1,850 and 2,200 euro/Sq m according to the property type. Partanna – Mondello, Tommaso Natale and Sferracavallo – Barcarello have similar prices, between 1,500 and 1,750 euro/Sq m for a prime property in good conditions.

Source: Economia Sicilia

Translator: Cristina Ambrosi

The two sides of real estate

12 April, Il Sole 24 Ore

It comes a moment in the life when you have to decide whether to buy a house and where. A house where to move out from parents, a house for a new couple or a family, but also for people coming from an ended relationship.

The answer is not easy, having to take into account personal necessities and budget, as well as the broader economic context. If it’s true that prices in Italy have fallen on average by 30% since the beginning of the real estate crisis, it’s also true that such important decisions cannot be made regardless the trust in the market and in the economy, the future interest rates (on which the mortgage instalments will depend), and the political stability.

That said, Italians are willing to buy a house, and not only in the big cities. The trend is confirmed by the quarterly data from the Revenue Office. All the four quarters of 2017 have registered an increase of transactions for residential properties, mostly as the main dwelling. There have been some interruptions throughout the year, as reported in June and September 2017, where the transactions increased only by 1.4%.

In the last three months of 2017, the variation has been equal to 6.3% (+8.6% for the first three months of 2017). At the end of the year, the Revenue has reported a growth for the eleventh quarter in a row in terms of transaction volumes (152,608 properties for a total surface of 16 million Sq m), going from +0.3% in the Centre to +12.2% in the South. The transactions in the non-province capital cities have surpassed those in the provincial capitals, with +6.7% against +5.5%. This is the signal that the trend that involved the main cities has spread also to the smaller cities.

Such dynamic transactions, however, don’t correspond to a hike in prices. For the sixth year in arrow, prices have reduced. The figures from Istat concerning the fourth quarter of 2017 show a 0.3% fall compared to the same period of 2016 (it was -0.8% in the third quarter). Compared to 2010, prices in 2017 have reduced by 15.1% (-1.4% for new properties, -20.5% for old ones).  This data doesn’t take into consideration the worst years of recession, from 2008 to 2010.

Why aren’t prices recovering? Mario Breglia, president of Scenari Immobiliari, says: “There are two main reasons why prices aren’t growing. The lack of inflation doesn’t cause prices to rise for any product or service, houses included. The other reason is the market as such. In fact, most of the demand is for a property upgrade (a bigger house, a better location, more comfort), but the average quality of the product on the market is very low. People prefer to ask for a discount on the price in order to be able to afford renovation works, as long as the location is good. For a good quality product (for instance, new properties well located), prices aren’t dropping. On the contrary, they’re rising”.

Not only. In Italy, there is still a stock of NPLs backed by real estate, in most cases properties that cannot be placed on the market, which needs to be disposed of. Furthermore, the composition of the demand has changed throughout the years. In fact, purchases financed by mortgages has become the prevailing part, while the investment component generally placed on the high-end of the market has reduced. As a result, prices haven’t grown much, and this trend has become difficult to invert.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Property prices have increased Milan

10 April, Corriere della Sera

Prices for residential properties in Milan are rising everywhere in the city. According to Tecnocasa, in the second part of 2017 prices have increased by 2.5% on average. Very surprisingly, the least dynamic area has been the city centre, where prices have increased only by 0.1%, while the Lodi-Corsica area has registered an increase of 3.5% and Bovisana-Sempione has reached 4%. The demand for properties below 150 thousand euro of value to rent has increased.

Source: Corriere della Sera

Translator: Cristina Ambrosi

Genoa, also rich neighbourhoods are in difficulty

10 April, Il Giornale

The reduction is less evident, but it doesn’t seem to stop. Property prices continue to drop, according to research by Tecnocasa based on the figures concerning the property market in Genoa. Also in the second part of 2017, apartment prices fell by 3.8%, reducing the contraction to 6.7% on a yearly basis. Considering that prices have been plummeting for the last 10 years, the values of properties should have been close to zero by now. However, the fall in prices is a positive thing for the market that has recently resumed registering transactions. Who sells has clearly lowered the expectations, while who looks for a house has now a broader choice.

It’s easier now for demand and offer to meet. As a result, 2017 reported 6,838 transactions, with a 3.3% increase compared to the previous year. The performance is even better in percentage points, +10.2%, concerning transactions concluded in the Province of Genoa, city excluded, where transactions were 3,400 with a price reduction equal to 3.8%.

What is surprising is the distribution of this price reduction. The real estate crisis hit unexpectedly the rich neighbourhoods that weren’t previously impacted by the price reductions. Perhaps, the property owners didn’t have much urgency to sell and preferred to wait for better times rather than lowering the requested price. The expected countertrend didn’t happen; hence, the property owners had given up. In the Quarto and Quinto areas, for instance, prices have fallen by 7.6%, while Cornigliano and Sampierdarena have resisted better, maintaining their values stable in the second of 2017.

The increased offer of properties on the market made possible for buyers to have a better choice according to their necessities. According to Tecnocasa, considering the requests received, “the most sought-after property is the three-bedroom apartment, representing 46.5% of the total transactions, while the budget is below 119 thousand euro for 49.1% of the buyers”. Tecnocasa in its report takes into consideration also the conditions of the properties on the market. “the reduction of values is partly imputable to the quality of the properties on offer. Many of them, in fact, require renovation works. What saves such properties is the presence of external spaces, a very popular feature, especially in the residential neighbourhoods”.

Despite the reduced prices, Nervi and Quinto have kept their high prices with most exclusive apartments valued 3,500/4,000 euro/Sq m.

Castelletto has the highest prices in the city centre. The Marassi-Molassana-San Fruttuoso area has registered a fall of prices equal to 4,0%. According to the analysts, this is due to “the many businesses that have closed down reducing the services offered in the area”.

Voltri, Pegli and Sestri have reported a fall of 3.3%. Prices in Multedo have remained steady whereas they have slightly decreased in Varenna, having lost most of the local businesses in the area. Valpocevera, Certosa and Pontedecimo have also decreased, this latter with a fall of 2.6%. Corniglianoa, Sampierdarena and Rivarolo are stable.

On the overall, the condominium expenses influence the choice. In most cases, houses are purchased thanks to a mortgage, while the average times to sell are between 6 and 8 months. The demand for apartments to rent is very high, especially from those who are currently unable to purchase a property such as young couples and workers coming from other towns.

Source: Il Giornale

Translator: Cristina Ambrosi

 

House prices, provinces are still suffering

03 April, Corriere della Sera

The latest property market report by Nomisma shows how the price crisis in the main cities seems to be definitely over, while medium-sized province capitals have registered a reduction on the medium values, even though not as dramatic as the previous years. The variation in March 2018 was -1.2% in comparison with the same period of 2017 for new properties, while the variation for old ones is set at -2%. A positive signal is given by selling times which have reduced everywhere.

Source: Corriere della Sera

Translator: Cristina Ambrosi

Italian real estate is giving positive signs, apart from prices…

03 April, Milano Finanza

In 2017 the Italian real estate reported a 5.1% growth in terms of transactions, while prices continue to drop, namely by 1.15% for houses. The figures come from the real estate report made by Fiaip (the Italian Federation of Real Estate Agents) in collaboration with Enea and I-Com. Moreover, the survey shows that “the number of Italians willing to buy a house has raised by 15%”, thanks to “a very positive moment for loans in the country”. In conclusion, we’re in front of a complex scenario that shows also a slight acceleration of the market, according to Fiaip, favoured by good income levels, although mostly registered in the main cities of the country, where real estate investments have increased. These investments consist mainly in properties for rental located in the art cities, where the market for short-term rentals to tourists is growing fast.

As already mentioned, the growth in transactions hasn’t translated yet in a price rise. The increase in the number of transactions has been driven by the good results registered in the provincial capitals and by property auctions that reported 230 thousand execution orders in the past year. Whereas in the remaining cities, there are still evident signs of the crisis of the sector, with little investments in the residential and in the commercial sector. On the overall, the market reports in comparison with the previous year a decrease for houses (-1.15%), as well as for offices (-6.2%), shops (-5%) and depots (-4.1%). However, there are areas where the market is growing. Fiaip shows how in nine cities house prices have grown: Bologna (+3%), Milan (+2.8%), Florence (+2.3%), Naples (+1.3%), Palermo (+1%). In the meanwhile, prices have dropped in Rome (-1.18%), Turin (-1.4%), Cagliari (-3.3%) and Genoa (-3.5%). According to the federation, we’re currently facing “a market that is still adjusting, where the offer is growing, the demand is rising, and the gap between requested prices and selling prices is reducing (-10%)”. In addition, good signals are coming from the reduction of selling times and of the applied discount.

Looking at the future, the outlook for 2018 is for “a further consolidation of the property prices”, even though “the uncertainties generated by a political instability might reflect negatively on the real estate market. Whereas the market might benefit from a solid Government that would introduce a lighter taxation on residential properties”. More in detail, “for some cities such as Milan, Naples, Bologna and Florence, the positive trend of prices will continue also in 2018”. Moreover, “there will be an overall rise of rents in many big cities with a solid recovery of the sector, where the turnover for properties for rental is excellent, especially in art cities”. Finally, the survey shows that “Italians are not taking full advantage of the tax reliefs concerning renovation and energy-saving works, as well as anti-seismic interventions on old buildings to make them safer against earthquakes”.

Source: Milano Finanza

Translator: Cristina Ambrosi

 

Record of transactions in Rome

03 April, Corriere della Sera

The first market in Italy in terms of number of transactions is Rome. Residential transactions are growing after having touched the lowest bottom in 2013. Nomisma has reported 32 thousand transactions referred to last year. However, the quality of the apartments on offer penalizes the market. In fact, there is a lack of new properties in the centre of Rome. The stock of remodelled properties does not exceed the 30% of the total properties on the market, while 70% of the properties need renovation works.

Source: Corriere della Sera

Translator: Cristina Ambrosi

Gabetti: in 2018 prices will stabilize and transactions will increase

21 March, Idealista

2017 reported a significant growth of the residential market, especially for what concerns tractions, while prices have slightly decreased. The figures are confirmed by the franchising company Gabetti, which also reports a reduction of times to sell properties. The company forecasts for 2018 an increase of transactions and the stabilization of prices. The recovery will be supported by the new regulations of the 2018 Budget. In 2017 the residential market has grown considerably. According to the Revenue Agency, 542,480 residential transactions have been concluded, 4,9% more than 2016. Concerning the offer, there is an increasing polarization between good quality properties (in terms of construction standards, energy efficiency, and location) and properties located in suburbs of little appeal whose characteristics don’t meet the demand’s requirements. For what concerns prices, according to Gabetti, the second quarter of 2017 reported an average variation around -0.3%, while Bologna (+0.5%) and Milan (+0.2%) registered a positive variation. Regarding the other cities, Naples and Florence have been substantially stable; while Palermo (-0.4%), Genoa (-0.7%), Rome and Turin (-1%) have registered further reductions. The average selling times in the big cities have been reducing, going from 6 months in 2014 to approximately 5.5 months in 2015, till 5 months in 2016. In the first quarter of 2017, the average was set at 4.8 months, it went then to 4.7 in the second quarter. However, the situation varies depending on the specific characteristics of the property and on the market price. Properties with prices aligned with the market and featuring appealing characteristics have reported selling times between 3 and 4 months. On the contrary, times have got longer for those properties placed on the market with too high prices, and they are seeing now their prices dropping. The same goes for those properties with characteristics not appealing for the demand. In 2017 the average discounts in the big cities were around 12% for old properties. Discounts tend to increase, reaching up to 10%, for properties with too high requested prices or with prices not aligned with the market.

Mortgages, according to the figures of Banca d’Italia, have increased by 0.3% in the first 9 months of 2017, for a total amount of 35.8 billion euro. The total amount issued in the first quarter has been 12.3 million euro (+11.5%), 12.8 billion in the second quarter (-3.4%), and 10.7 billion euro in the third quarter (-6.4%), compared to the same period of 2016.

For 2018 the outlook is for an increase of transactions in the first quarter, along with a stabilization of prices. Some cities such as Milan, Bologna, Naples and Florence will continue the positive price trend. The new regulations introduced with the 2018 Budget will have a positive impact on the market, thanks to the tax deductions for renovation and energy saving works, that will give an additional impulse to the sector. The incentives for purchasing properties to renovate has been extended till 31st December 2018, and it implies the possibility to deduct from taxes the expenses for the interventions as well as the expenses for the energetic requalification. There is also the incentive for anti-seismic interventions, with a tax deduction of 70% till 2021, for interventions aimed at reducing the risk level related to earthquakes. However, it will be necessary to the evaluate the impact on taxes of the reforms introduced by the new Government.

Source: Idealista

Translator: Cristina Ambrosi