Tecnocasa: how the real estate market has changed since 2007

13 December, Wall Street Italia

2007: residential loans register a slowdown due to the subprime mortgage crisis, resulting in a reduction of property transactions (-4.6%) and property prices (-1.0%).

2008-2009: the credit crunch continues; prices and transactions reduce further due to the increased offer on the market.

2010: transactions stabilise thanks to the State support to credit and the increased demand from households.

2011: the economic crisis begins; prices and transactions continue their decline.

2012: the market registers an all-time low with prices falling by 10.2% and transactions by 25.8%.

2013: transactions plummet to 403,124 in a year, price decrease by 8.7%.

2014: the mortgage market restarts thanks to the introduction of the Quantitative Easing by the ECB.

2015: the demand for properties resumes growing.

2016: transactions rise by 18.9% with the support of the credit market.

2017: the market is out of the crisis.

2018: the positive trend of the real estate market continues. The year is expected to close with 580,000 transactions.

2019: the market is estimated to reach 600,000 transactions. The credit market trend is positive, despite a slight slowdown in the issuing of new mortgages.

Source: Wall Street Italia

Translator: Cristina Ambrosi

Houses, prices down for the sixth year in a row: -0.4% in 2017

09 April, Corriere della Sera

Prices are struggling to raise. They registered a negative result also in 2017 for the sixth year in a row. Istat registered a 0.4% drop compared to 2016 (when the variation with 2015 was equal to -0.8%), even though the reduction is more contained in comparison with 2012. On a long-term perspective, prices have decreased by 15.1% over the span going from 2010 to 2017: -1.4% for new properties, -20.5% for the old ones. The recovery of transactions is not enough to make prices grow again. According to the Real Estate Market Observatory of the Revenue Agency, transactions have grown by 5.1%. Old properties were particularly impacted in 2017, registering a loss in value of 0.6%, while new constructions reported a little growth equal to 0.1%. The other tiny signal of growth was reported in the fourth quarter of 2017 when property prices increased by 0.1% compared to the previous quarter. However, this rise is due to new properties (+0.7%), while prices for old properties are stuck. According to the outlook, the 2017 trend will continue also in 2018 with a variation of -0.1% if prices remain stable.

Source: Corriere della Sera

Translator: Cristina Ambrosi

Verona, stop to Arsenale and new shopping centres

12 October, Il Sole 24 Ore

Blocked the projects of the former City Council, requalification project near Piazza delle Erbe

In its first one hundred days, the new Council of Verona has already spoken on the themes of development and urban regeneration, pointing out as a priority the recovery of some areas, abandoned and not in use, rejecting the project of the old Council for the Arsenale requalification, cancelling substantially the financing project started by the group Italiana Costruzioni, giving a clear message against the opening of new shopping centres, considering that, after the success of the new Adigeo, there are other nine in the pipeline.

Ilaria Segala, Councillor for Urban Planning in Verona, comments: “The debate over Arsenale is still open, we’ve promoted a collaboration with Milan Institute of Technology to identify the best functional mix, and we’ve been listening to people. We’re planning to finalise the project by the end the year and put on the books 9 million euro for the first phase of interventions”. The new administration is currently evaluating partnerships with privates, such as leasings, but with a significant public participation, avoiding the private part to push too much on the commercial side of the project. Last summer, the new administration rejected the project, declaring it not of public interest. What will be then the destiny of Arsenale? And what about Palazzo Capitanio in Piazza dei Signori? What to do with Castel San Pietro, just behind Teatro Romano? All questions still unanswered. “It needs to be studied”, comments the Councillor.

Verona seeks solutions regarding culture, but the city has to deal with the significant demand for commercial spaces and, for the future, it will need to find a solution for the reconversion of a big park in the former train station area beside the railway. The old markets and factories have been only partially reconverted. The city needs a clear urban plan for public services in order to create a structure supporting the community.

In the meanwhile, the Foundation Cariverona has appointed Marino Folin for the development of a master plan to promote and reconvert eight properties for a total of 90 thousand Sq m in the heart of the old town, right next to Piazza delle Erbe. “They are properties of the Foundation and of Torre SGR – explains Folin, former rector of the Iuva University in Venice, who since this year is also a member of the Foundation Board of Directors – we will propose to them a single solution to reconvert the assets”. The properties include Castel San Pietro and the buildings at number 1 and 2 in Via Garibaldi (previously occupied by the Unicredit headquarters), Palazzo Forti and a small building in Via Rosa, Palazzo del Capitanio, Palazzo Bottagisio, and a building in Piazzetta Monte. “Most of the properties are vacant or they will be very soon, they are all in strategic positions – comments Folin – of significant dimensions and of excellent architectural quality. We need to reinvent their functions, looking at the future of Verona”. The master plan will be ready in one month and Folin believes that this is the occasion to reflect on the vocation of the city and on the reuse of its buildings, some of them even in the short term.

For what concerns residential developments, there are no significant news, speaking of dimensions, except for the operation promoted by Sarmar in the former barracks area of Passalacqua and Santa Maria, not far from Veronetta where the Municipality has won a grant for 18 million euro, with the Piano Periferie project, to reconvert a silo to serve the university nearby.

Whereas the operation Verona Central Park has progressed. The share of social housing for about thirty accommodations has already been sold. There are in total sixty accommodations of subsidised constructions: 20 are already occupied and 40 are sold and they will be delivered in the first months of 2018 at a price of 2,200 euro per Sq m. A third construction site for other 20 apartments might start soon.  Concerning free construction, the plan is to build 200 apartments that will be put on the market at a price of 3,600/3,800 euro per Sq m. The construction of the first 100 houses should start at the beginning of 2018. According to Sarmar, from a market survey emerges that this area with such a real estate offer might reach values around 4,000/4,200 euro per Sq m.

 

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Assisted living, 10-12 million for a facility

12 October, Il Sole 24 Ore

The alternative investment sector dominates the chart of the assets considered the most interesting for the next 12 months. According to the report “Emerging trends in real estate” by Urban Land Institute e Pwc, 44% of the real estate leading companies are willing to invest in alternative assets (+16% compared to two years ago). Assisted living is, together with healthcare (hospital facilities), one of the most interesting sectors right now.

This is a fast-growing asset class in Italy, attracting the interests of national and international investors. “In Italy, we’ve started recently seeing the industrialisation of the sector along with the institutional investment activity – explains Vito Bisceglie from Dla Piper – combined with the separation between management and property of the facility”. He makes the example of the first Italian operator, Gruppo Kos, who manages about 81 thousand beds, in France, it wouldn’t figure even among the first ten companies. “While for what concerns healthcare we have some consolidated realities capable to compete at European levels, such as Gruppo San Donato, Humanitas, and Gvm, for assisted living the market is still very fragmented. The sector has great potential since there are some necessities that are currently not met, also for regulation reasons”. What are the dimensions of the operations we’re talking about? “On average, for assisted living facilities the real estate component is comprised between 10 and 12 million, with a standard dimension of 120 beds”, explains Bisceglie. What about the returns? “Investors expect a return between 5 and 7%, and small facilities cannot fulfil these expectations. The area where to invest is mainly the North, including Tuscany. International investors seek quality properties in the cities, but they have to deal with the cost problem: the return comes from fixed fares, regardless of the location of the property, hence a high cost per Sq m impacts on profitability. In Rome, for instance, there is a huge need for such facilities, as privates are not investing in them due to the little convenience of the operation”.

 

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

To buy a house Milan beats Amsterdam

5 Ottober 2017 La Repubblica

A professional working in the service sector has to work “only” 5.7 years to afford to buy a 60 Sq m apartment.

Is Milan better than Amsterdam, Munich and Stockholm? For what concerns the convenience of the property market, it is. In comparison with the other European cities, Milan offers the better value. It’s reported by the survey on real estate by UBS. The survey analyses the prices for residential buildings of 20 metropolis all over the world.

A professional working in the service sector has to work “only” 5.7 years to afford to buy a 60 Sq m apartment. Of the other European cities, this is the best performance. Compared to 2007, the year when the recession hit, the actual house prices are 30% lower. In fact, the slow recovery has penalised the real estate market. However, according to UBS, the improvement of the economic situation should increase the value of the properties.

Instead, the rest of the continent is at risk of hyper-valuation. The property bubble index is rising for all the European cities. Spikes in prices have been recorded in Netherlands (Amsterdam), Germany (Frankfurt and Munich), and Sweden (Stockholm). London is at stake, even though the risk has decreased compared to the previous year.

In the past few years, the most prestigious locations have benefited from the price increase, thanks to the increased wealth of families residing in cities. The growth of the international demand, especially from China, has penalised local buyers. “The general improvement of the economy, combined with a solid growth of the incomes in the main cities, together with excessively low financing costs, have led to a high demand on accommodations in the big cities”, explains Claudio Saputelli from UBS. The limited offer in the cities has caused the prices to spike, increasing the risk of a property bubble. While Milan registers a countertrend, making the city less exposed to this risk.

 

Source: La Repubblica (by Gianluca Brigatti)

Translator: Cristina Ambrosi

Dea Capital Re Sgr sells five telephone exchange buildings

12 October 2017 Il Sole 24 Ore

Busy days for Dea Capital Re Sgr, which changed the name from Idea Fimit Sgr: first the negotiation with the big international hotel chains over a trophy assets portfolio in Rome (where new luxury hotels might rise), and now the sale of one of its reserved funds composed of five telephone exchange buildings. Four of them are located in Milan and one is in Rome for a total Gla of 20,00 Sq m and they were sold to another Italian asset manager. The consulting firm Cbre Italia assisted Dea Capital in the operation.

The four properties in Milan are located in the areas of Porta Romana, Porta Venezia, and in Corso Vercelli, while the building in Rome is in Nomentano. All the areas grant a potential repositioning of the properties once the leases expire.

“This is the confirmation of the excellent state of the Italian property market, especially in Milan, which is attracting an increasing number of Italian institutional investors as well as international, interested not only in offices and high street but also in alternative asset classes,” says Alexandre Astier, Capital Markets Cbre Italia Managing Director.

 

Source: Il Sole 24 Ore (by Paola Dezza)

Translator: Cristina Ambrosi

Residential market: people in Genoa want a big house

11 October 2017, Genova Today

According to a study by Tecnocasa, the most requested houses in Genoa are the four-rooms ones. Almost no interest in one-room apartments.

The positive trend of the Italian real estate continues and sees the demand increasing and consequently the sales, as confirmed also by the Revenue Office. The factors for these results are convenient mortgages, house prices at their lowest, and a renewed trust.

In the last few years, the property market has seen the prices progressively falling and this has changed the type of property requested leading to a shift towards bigger properties. However, in this first half of the year, this trend is starting to invert thanks to the return of investors, registering interest also in smaller properties.

Offer is shrinking, especially for the finest quality houses. The selling times have slightly reduced, especially if the property is correctly evaluated.

The analysis of the demand shows that in the big Italian cities the most sought property is the three-room apartment with 40.1% of the preferences, followed by the four-room apartment with 24.7%, and the two-room apartment with 22.9%.

In July it was registered an increase in the demand for for-room and one-room apartments compared to the previous six months. In Genoa, the most sought apartments are the four-.room ones. The request for one-room apartments is below 1%, The three-room apartment still holds well.

The analysis of the offer shows that the most common type of property in the big Italian cities is the three-room apartment with 32.8%, followed by four-room with 25%, and finally the two-room apartment with 23.4%.

 

Source: Genova Today

Translator: Cristina Ambrosi

Real estate, Milan is the city with the most interesting prices

2 October 2017 WSI

Milan is the European city with the most interesting prices, according to UBS Wealth Management with its  UBS Global Real Estate Bubble Index 2017, the yearly report of the Swiss bank analysing the prices of residential properties in 20 metropolis worldwide.

From the analysis, it turns out that a qualified professional of the service sector has to work on average only 5.7 years to afford a 60 Sq m apartment, this signals the most convenient conditions in all Europe.

Toronto is the city with the highest risk of a property bubble, followed in decreasing order by Stockholm, Munich, Vancouver, Sydney, London, Hong Kong, and Amsterdam. London is still at risk, even though less than last year.

 

Source: WSI (by Alessandra Caparello)

Translator: Cristina Ambrosi

Ubs, properties are overpriced everywhere (except for this city)

 

2 October 2017

The property market in cities worldwide is still overpriced, but there is an important exception: Milan. It’s stated on the yearly Ubs report, Global Real Estate Bubble Index. According to the report, the cities risking a property bubble would be Toronto (Canada) at first place, followed by Stockholm (Sweden), Munich (Germany), Vancouver (Canada), Sydney (Australia), London (UK), Hong Kong, and Amsterdam (Netherlands).

“The improvement of the general economic situation, partly accompanied by the solid growth of the  salaries in the main cities, combined with excessively low funding costs, led to a high demand for accommodations in the metropolis”, explained Claudio Saputelli, head of Global Real Estate of the  Chief Investment Office of UBS Wealth Management.

According to Ubs, prices are destined to grow in Milan too, even though at the moment prices are 30% lower than those in 2007, due to the persistence of the economic recession in Italy. Assuming a qualified professional working in the service sector, he’ll have to work for 5.7 years to afford a 60 Sq m apartment. Therefore, Milan is one of the most convenient cities for what concerns properties. For the future, Ubs expects the economic recovery to fuel occupation and salaries in Lombardy, hence the house prices will rise fast.

The index developed by Ubs to monitor the real estate prices of cities worldwide shows great increases for Amsterdam, Frankfurt, and Munich. London is still risking a property bubble, even though the risk level has lowered compared to the period before the Brexit referendum. Zurich and Geneva in Switzerland appear to be moderately overpriced.

 

Source: http://www.wallstreetitalia.com/ubs-immobiliare-e-sopravvalutato-ovunque-eccetto-in-questa-citta/

Translator: Cristina Ambrosi

 

Matteo Corsini on the real estate outlook for 2018: “The property market will grow in Italy between 80% and 120% over the next 4 years”

 

London, 1 October 2017

After several years of  crisis of the real estate market, the bankruptcy of banks such as Lehman Brothers and MPS, and a third marriage abruptly ended, a legend of the Italian real estate, Matteo Corsini is back on the scene with a Global Capital investment fund, promising to invest in the Italian market over 100 million euro. “We have assets for over 180 million euro, we’re solid and this will permit us making new investments in the “luxury treasure” sector or, as many call them, “trophy assets”.

What does it mean exactly?

“Properties like blue diamonds, of the finest quality, those that make the difference.”

How will the real estate sector behave?

“I believe that the next months will be very harsh for the Italian property market, but things will improve in the second half of 2018.”

Aren’t you saying too much about your real estate investment strategy?

“The property market offers good investments opportunities and in this phase, we’re very aggressive, we believe in 80-120%  returns over the next 4 years. The most profitable sector where to invest in Italy will be the real estate market.”

A couple of weeks ago you stated that you’re ready to invest over 100 million euro in Italy. How is the purchasing going?

“We’ve started to invest, so far we’ve invested over 6 million euro with a financial leverage of 98% which we’re expecting to reduce over the next few months. We believe in this market, even though it’s very selective and it’s tricky to understand where to invest.”

What’s the secret to manage all this money?

“Purchasing properties, especially during a recession, is not for everybody. This is a market for experts, companies with competent analysts, a task force of legal consultants, capable of tailoring contracts according to the investment programs. If you think about it, in the last few years, all the major Italian construction companies crashed, Rome is a cemetery. We’re among the few operators that today are investing and renovating. We’ll continue because we believe in transformation. Rome needs to be up to date, we’re in the future in 2018, and frankly, the technological progress has its share on the future of real estate.”

Somebody says you’re a legend, starting from Botteghe Oscure, you’ve achieved so much in the property sector. A finance genius, able to build leverages of 99% of the property portfolio value.

“I don’t know what they think about me, whether I’m a legend or not. I believe I’m the best, the most competent, I’ve studied a lot, in conclusion. At school, I used to solve geometry problems so quickly, that my teacher Palmieri would measure the time with a chronometer.”

 

Source: http://www.corsera.it/notizia.php?id=9139

Translator: Cristina Ambrosi