Tag: residential property market

Genoa, the boom is already over. And house prices continue to fall

06 December, Il Secolo XIX

The good trend is already gone, or almost: the property market has stopped, after 24 months of continuous growth. A sign that what was possible to achieve has been achieved, the future is uncertain. The thing is, in Genoa, without a solid project and a promotion plan to make the city more attractive, there will be little results going forward. The figures from the Revenue Office picture a city that is stuck. The city reports a negative trend in property sales in the third quarter of 2017 compared to the same period of 2016.

Too many houses and too little money

“We have too many houses and few buyers with little money”. Eugenio Del Gaizo, real estate agent and Fiaip representative (the association for professional real estate agents), explains briefly what is happening, the trend was already announced, but it was thought that it would have been compensated by a rise of prices. Nothing of this: in Genoa, houses are still selling, but less than before, despite the affordable mortgages and the lowest prices ever. “We live in a city designed in the 60es, during the industrial and economic boom, when the city needed a million people to go to work in the factories and in the contractions sites. We achieved that in the 70es, today we’re 580 thousand people with a big elderly population”. Hence, the areas that sell well are San Fruttuoso, Marassi, all the areas around the old tow s of Ponente e and Valpocevera. “It’s obvious that a house in Quinto will sell, but this is not relevant – explains Del Gaizo – what is lacking is the demand for houses in popular areas, which is progressively reducing”.

Mortgages and rents

The mortgages to buy the first house have seen increasingly lower interests. Banks require very strict guarantees, and nowadays knowing the right person doesn’t help anymore. In Genoa, the demographic categories haven’t changed, and the market is closing. Young people prefer to rent, the market here is steady, even though not thriving, thanks also to the boom of rentals for touristic use, with the idea in mind to go somewhere else, in Italy or in Europe, rather than buying a house and staying in the city. Young people want to travel, take challenges, they want to move easily to another city or country, continues Del Gaizo – if they want to stay here, they’re right to find something at acceptable prices, without spending most of their salary. They’d rather go away”.

Prices are dropping

“I’m not surprised that prices are falling – says Filippo Delle Piane, from Genoa, vice-president for the constructors’ association Ance – what surprises me is that in Genoa, even in the most beautiful parts, the prices per Sq m are still falling. This is becoming a structural problem”. If Milan, Rome, some areas of Turin and some cities in the South are seeing their prices rising again, after ten years of recession, in Genoa this hasn’t happened. “The difference with the big cities is perhaps that Genoa hasn’t renewed its real estate offer. It’s difficult to confer the idea that not only the area but also the type of property impacts the price”. There are also other penalising factors: too big houses that cannot be divided (these properties have seen a 20% fall in sales) and too high taxation for the most prestigious properties.

Source: Il Secolo XIX

Translator: Cristina Ambrosi

Prices are falling, now it’s the time to buy a house

05 December, La Stampa

The map of bargains for each city

This is a good moment for who wants to buy a house: prices are still low, and mortgages are at their lowest. Nomisma speaks about a countertrend coming to the property market. For the moment, the turning point is the increasingly dynamic transactions (545 thousand by the end of the year). This is the first signal. To see the prices rising again, we’ll have still to wait some time, even though some cities have already started seeing their prices growing again. Milan is leading this trend and the city is growing all the sectors. A trend that hasn’t been reported in the last ten years. For what concerns house prices, Nomisma believes this trend might extend soon also to other cities. However, the institute warns about the effects of the divestiture process of NPLs, the bad loans held by banks that include houses, apartments and shops.

Where are the good signals? Milan, as already said, is the only one where the recovery seems to have started, with a +1% in the first months of the year. The growth was registered also in Naples (+0.7%) and Verona (+0.5%). Some cities are far behind, like Genoa which is at the bottom of the list with a reduction of 3% in the first semester.

Where can one earn from the purchase of a house? Tecnocasa has built a map of the most dynamic Italian cities. “The property market has arrived at a turning point, as shown by the sales and prices figures, which is some areas have returned being positive again”, states Fabiana Megliola, responsible for research at Tecnocasa. Urban interventions are pushing this growth in some cities, especially for what concerns requalification projects. Moreover, the presence of important universities and companies in Milan has favoured an increase in demand for investment purpose”, explains Megliola.

On the opposite side, there is Genoa, the city that is struggling the most due to the poor quality of the offer and the low purchasing power of the potential buyers, all elements that make the recovery difficult.

Rome, despite the recovery of transactions, is not reporting changes in prices. The centre is still one of the most dynamic areas, both in terms of first house and investment purchases.

Naples is under the spotlight with an increase of prices of 0.7%. The city is benefitting from tourism, especially in the city centre where investors are focusing on, and by the arrival of the Apple Ios centre and universities, giving a new impulse to purchases.

Finally, Turin: here the first positive signs come from the suburbs where prices, after having reached the lowest point, are now rising again, especially for what concerns the first house market. “The city centre, despite the prices dropping, is living a revival in the Parco Valentino area, thanks to the return of investors, attracted by the university faculties. Other price increases in the city have been registered as a result of a better quality of the offer”, explains the expert.

Source: La Stampa

Translator: Cristina Ambrosi

Real estate: the market slows down in the third quarter. Good performances for Palermo and Milan

05 December, Il Sole 24 Ore

The property market’s first stop since the beginning of 2014.

A meagre +1.5%. This is the growth rate of the house sales in Italy. Only three months ago the figures reached 3.8% (in the same period of the previous year), while in the first quarter of 2017 the growth was equal to 8.6% compared to the first three months of 2016.

In total, 122,378 houses have been sold, 13,104,856 Sq m altogether, whereas they were 145,529 in the previous quarter. The number is slightly higher than that of transactions closed in the third quarter of 2016 and in the first of 2017. At a geographical level, the North-East has registered a negative performance, with transactions fallen by 0.9% with 23,537 units.

The growth of the residential market slows down in the 8 most populated Italian cities, where 21,472 transactions have been reported in total, for an increase of 2.1% (+4.4% in the second quarter and +10.8% in the first quarter of the year).

Palermo and Bologna have registered respectively the best and the worst performance. In Palermo, the transactions have grown by 11.5%. Genoa is not doing very well. Here the transactions have fallen by 7.4% compared to the previous year and they were stuck in the second quarter of 2017. Milan (+6.7%) and Napes (+7.2%) are set in the middle of the chart.

The market is completely stuck in Rome (+0.3%), with little more than 6,900 houses sold.

This situation of the real estate market in the eight cities is confirmed also by the analysis in terms of surface sold. The total surface of the houses sold in the big cities barely reaches 2 million Sq m, a little growth compared to the third quarter of 2016. Turin and Rome have reported negative results, even though with a decrease below 1%. The average surface of the houses sold is lower in Milan and Turin, below 90 Sq m, while the highest value is recorded in Palermo, with 108 Sq m.

Concerning the territory, the analysis shows how sales have increased in the province capitals by 1.2%, while in the other cities the value is set at 1.7%. The results have improved in this last quarter only in the two islands, where transactions have grown by 4% (0.9% in the previous quarter), consequently to the growth of the province capitals for 8%. Among the areas, the South has registered the biggest growth, with an increase of 4.4%, where smaller cities have grown by 5.1% and province capitals by 2.4%.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

 

The property market in Bologna is giving signs of recovery

06 December, Il Resto del Carlino

“Since already three years, the Bologna property market is giving solid signs of recovery, regarding transactions of new as well as old properties. In the province too, the transactions have restarted over the last year: some cities have registered increases higher than those of Bologna”.

This is how Giancarlo Raggi, Ancebologna president, explains the current situation of real estate in Bologna. However, who is looking for a house to rent or to buy complains about the little offer compared to the demand. “It’s surprising how a central area such as Città Metropolitana has apparently run out of properties on offer – notes Raggi – forcing many students and workers to give up living in Bologna and in the towns nearby. Concerning old properties, there is still a slight contraction of prices for the oldest buildings located in the suburbs – clarifies the president – however, concerning new properties, prices are stable and has started a positive trend of gradual growth. The rental market too is characterised by a positive recovery”.

The attention is on the growth of the demand for houses in the city. “This is partly due to three factors”, says Raggi, listing them: “the demographic trends and the related demand for residences to buy or to rent; the new feature of the house as a product, from the unsold to the not-built; the profitability of rentals, the growth of mortgage issuances, the tax incentives for buying and for renting”. Let’s move the attention to the demographic trend. “Concerning demographics, we must note how Bologna continues being attractive with a positive migration trend”, explains the Ancebologna president.

Raggi, finally, concludes with the analysis of a property market that “seems to have returned to pre-crisis levels, the negative phase corresponding to the global financial crisis of 2008 has now stopped. The market, especially in Bologna, is now characterised by a lack of offer of developable areas and of properties to demolish and to reconstruct or to requalify in order to relaunch the residential offer to meet the increasing demand”. From here the invitation: “The local authorities must meet these needs – says Raggi – promoting the restart of projects that are stuck such as Navile and Lazzaretto in Bologna, and giving incentive to the reservation of abandoned properties in the city”.

Source: Il Resto del Carlino

Translator: Cristina Ambrosi

Prices to the roof and 700 thousand unlet houses: rents in Milan are a nightmare (definitely not cool)

30 November, Linkiesta

The balcony. If we had to find a symbol to the craziness of the Milan real estate, it would definitely be the balcony as the true object of desire for whom is desperately looking for a house in the city. Between a mega terrace facing on City Life and the loaded drying racks in the kitchen, there is the supply and demand for rentals in the city which has the worst prices in the country. The young, wealthy, international Milan aspiring to Ema, here shows to be backward and old when it comes to offering an apartment to rent for a short time. Unable to respond to an increasing demand for rents, the Milan homeowners prefer the more traditional sale. Which it seems to not be interesting anymore. Not only for financial reasons. “Five years ago, the rental market was driven by necessity: those who were renting were students, young people at their first job and families that couldn’t afford to buy a house”, explains Carlo Giordano, Immobiliare.it Ceo, online advertisement leader. “In the last five years, renting has become a choice due to the mobility of work and new lifestyles. There is no more the anxiety to buy a house. Success doesn’t mean anymore owning a house”.

The confirmation of this countertrend comes from Sunia, the tenants’ associations. “There is a countertrend”, explains Lina Calonghi, from the Sunia offices. “Buying a house is no more a requirement, and this depends on economic factors. The mobility of work, the idea of being able to move without problems from a city to another, make think that demand for rentals in Milan will grow even further”. This is the logic of the sharing economy: possession is no more a priority.

Some of the big companies present in Milan have understood that, offering to top managers, often having to move workplace, apartments on rental as a benefit in their employment contracts. As a result, in a prime neighbourhood such as City Life, a 20-storey tower with 60 apartments, previously completely empty and with unaffordable rents, is now fully rented.

In the last year, requests for rent have increased all over Italy, but Milan beats the other cities with a yearly increase of 3.1%. On Immobiliare.it, researches for apartments in Milan double those for purchasing. “Milan is the only marketplace in Italy that has registered a strong recovery of rents and rental prices”, explains Gabriele Rabaiotti, City Councillor for the House in the City of Milan. “The market is responding slowly”.

And without adjusting to the new demand for rental. If in Italy 81% of the population own a first house (against the 36% of Germany, for instance), the market in Milan is aligned with the national spirit. “The offer for purchasing is higher than that for renting”, explains Giordano. Unaware that the returns from renting might reach 4-5% yearly after taxes. According to Tecnocasa, for an old two-bedroom apartment the average yearly return in Milan is 4.9%. More than a 15 years government bond which grants a net return of 1.93%.

“Homeowners are mostly small owners”, explains Giordano, “without a modern investment culture. In Italy, unlike other countries such as Germany, the companies investing in residential lease are very few. There are not tax reliefs, and many of these companies fear the arrears from tenants”.

The companies that used to own big properties in Milan have disinvested almost everything. There are only a few left, but with portfolios of 100 properties, each capable of altering the market. Immobiliare San Carlo Trieste alone owns 1,700 houses in the city. Then there the properties owned by the social security institutions, Policlinico, Pio Albero Trivulzio, the Cà Grande fund and also the Archiepiscopal Curia of Milan. “These institutions or medium-large-sized companies have high return potential for their properties, for this reason, they don’t accept lower rents and prefer to leave them unlet”, explains Rabaiotti.

After all, between excessively high rents and disappointing sales, there are 700 thousand unlet houses in Milan. But with such a high demand and an even lower offer, prices continue to rise. The cost of rents is growing again all over Italy, but Milan is +0.8% above the average, with an 8% increase for furnished houses, according to the latest report from Solo Affitti. The average rent is 938 euro. The gap with the other cities is getting wider, for example, the difference with Rome is 150 euro.

The same is true for shared apartments. “Sharing a house is becoming more and more widespread”, explains Giordani. “Young workers aspire to a better quality of life. For this reason, they prefer sharing in prime areas, rather than renting a studio apartment in the suburbs. And having a chat at the end of a day is always nice”. Certainly, he adds, “being in a couple is always the best way to share rent costs”. If you’re alone in Milan, you spend more.

For a single room, the average is 528 euro monthly, with a 4% increase from last year. Beds in shared rooms have increased even more, with an average rent of 388 euro monthly, 12% more than last year. Who wants to live in the trendiest areas of the city like Navigli and Porta Nuova, will have to consider a budget of over 610 euro for a single room.

The real estate agency fee is often added to this expense since such agencies cover 80% of the ads in Milan. They’re usually beautiful and expensive apartments. The options are two: either the agency takes 10-15% of commission, or it asks for one-two months rent. Making costs rising even more. “The problem of rents is not only linked to prices but also to quality”, says Giordano. “The quality of the properties offered is generally low. This is the symptom of n backward idea of lease, referred to whom cannot afford to buy a house”. There is any sort of property advertised: crumbling houses, badly kept and randomly furnished, as they were the garage of the first house. The offer is concentrated in the suburbs. “In the centre, homeowners tend more to sell, even though nobody buys anymore”, says Giordano. “Being the demand higher than the supply, the average rentals increase considerably if the property features some additional comfort”. That might be just a couch in the living room, a more modern kitchen, or the much-desired balcony.

Searching and finding the right apartment in Milan is quite a challenge. “I have seen everything”, tells Giorgia. “From extremely pricey houses with just one small window for a surface of 50 Sq m to apartments owned by a company requesting to subscribe a second house contract for the duration of one year, so that they could kick me out of the house anytime”. Then there are scams. “When you think to have found the apartment of your dreams at the perfect price, you have always to ask yourself where is the catch”, says Marco. “It’s very common to see the perfect ad, so you write, and they tell you that they’re abroad and that a trusted person will give you the keys. Of course, only after having provided your credit card details as a guarantee or having transferred money to them”. The most commonly used name for this sort of brokerage is Lucas Holm, reported on all the tenants’ forums, who was unexpectedly forced to return to Copenhagen. But there is also Maria Falcone, who clearly writes using Google Translate and requests in broken Italian the last payslip for her trust.

Tricks that don’t fool the experts in Milan. But the newbies smashed by the exorbitant prices might fall into the trap. Even the apparently legal lease contract might be in reality not legal at all. “Contracts not compliant with the regulation are very common”, says Lina Calonghi. “It mostly regards temporary contracts of one year not compliant with the Law, without sticking to the criteria set for lease contrast. For this reason, litigations with tenants are very frequent. This scares, even more, homeowners in renting their properties”.

Having to face this jungle, the City of Milan, Sunia and other tenants’ associations are trying to solve the issues around rents promoting regulated lease contracts, 3+2 contracts at fixed price with fiscal benefits for homeowners.  At the end of the day, despite the lower rent, landlords earn more or less the same amount they would with market prices. In Milan, however, contracts of this type are very rare. “There isn’t a great interest in promoting them due to the fear that they would lead to controlling prices in general”, explains the City Councillor Gabriele Rabaiotti. “Moreover, there is little political interest towards this instrument. We renewed the agreement in 2015, which was expired since 1999”. But since June 2015 only 2 thousand regulated lease contracts have been registered on 30 thousand truncations yearly. Landlords fear that some of the benefits, such as that on Imu, might not be granted for the whole length of the contract.

“The social agency “Milano Abitare” has reviewed the communication plan on the regulated lease contracts”, says the City Councillor. “Besides, we’ve made a new agreement with three real estate agencies, Gabetti, Grimaldi and Professione Casa, to promote this low-cost channel among their clients”. In the meanwhile, the City of Milan is dealing with some big property owners of the city to adopt fixed prices. It will not be sufficient to solve the crazy rent situation in Milan, but it will grant to someone an apartment with a balcony without spending the whole salary.

Source: Linkiesta

Translator: Cristina Ambrosi

Nomisma, we’re at the beginning of a new cycle: soon the prices of properties will grow again

30 November, Interniews

The Italian real estate market might be finally arrived at a turning point in 2017, with the end of a recession that lasted for ten years. The new cycle should be starting soon. This is the message given by Nomisma, on 29th November in Milan at the presentation of the third report for 2017 “Property Market Observatory”, with the collocation of Intesa Sanpaolo Private Banking.

In the next years, Nomisma expects a continuous growth of transactions, with the residential segment reaching 545 thousand by the end of 2017 and possibly amounting to 586 thousand by 2019. The real news is that the trend of prices is finally stable. In fact, Nomisma doesn’t see for 2018 any significant variation (-0.3%) at a national level, except for some positive variations in Milan, Florence and Bologna. This trend will extend to the rest of the country only in 2019 (+0.3%) and it will consolidate in 2020 (+0.9%).

The Survey was presented at the Cariplo Foundation. Saverio Perissinotto, General Director for Intesa Sanpaolo Private Banking has started the event.

“Not being an expert, I can sense anyway some dynamism in the sector, not only in Milan. In Italy, the total assets owned by families amounts to approximately 9,000 billion euro, half which consisting in real estate assets. This is very interesting”, observed Perissinotto, “One-third of the real estate assets, hence about 1,500 billion euro, is owned by barely 5% of the Italian families, confirming the existing strong concentration of wealth”.

Andrea Goldstein, Chief Economist at Nomisma, has shown the macroeconomic situation.  “We’re assisting at an improvement of the Italian economy fuelled by the positive trend of the global economy where the developed countries, besides the emerging ones, have resumed their growth, and the eurozone, except for Italy, would grow more than the United States”.

Italy, unfortunately, is still suffering from the huge burden that the country carries: an exorbitant public debt that is not diminishing and that represents the real element of vulnerability. However, the latest figures confirm the growth of Italy in 2017, set around +1.5%, and for 2018 the outlook of the Government, traditionally very cautious, is a 1.2%. According to the experts of Nomisma, “the climate is substantially positive, with consumptions and investments growing. Families’ savings are growing too, and there are fewer families forced to use their savings to survive. Only exportations, one of the vital elements of the Italian economy, is still stuck. In conclusion, even though Italy is at the bottom of the list in Europe, there are solid reasons to be positive”.

The Italian real estate has restored based exactly on this climate of positivity. “We’re finally going through a new phase of the market that registers a break from the past”, started Luca Dondi, Nomisma Ceo. “We can’t say that the storm is completely over, but all the indicators that last year showed signs of trust have become reality”.

Among these, the Ceo has mentioned the lower default rate of Italian enterprises, today set at 4% and almost halved compared to 2013. Then there is the general improvement of the issuance of new mortgages to families for the purchase of houses, with levels returned at pre-crisis levels, around 50 billion euro, against 22-24 billion euro of the period 2012-2014. It’s indeed the restart of credit that supports sales in the residential market, reaching 545 thousand transactions (+5.5% compared to 2016) and make Nomisma think that they’ll likely reach 560 thousand transactions in 2018. There are still 314 thousand transactions in order to return to the pre-crisis levels of 2006, the last year of expansion before the recession hit. But according to Nomisma, the growth will be steady.

“Prices are quite stable for the moment in the first 13 cities of the country analysed in our survey”, continues the Ceo, “but the recovery has already started. We’re facing a new phase of expansion”.

Milan, as usual, anticipates the trend and it’s the only city that has registered in 2017 an increase in prices. The city, therefore, is in pole position for the recovery, that will expand in 2018 to the other cities, starting from Bologna, Florence, Venice and Naples.

The same dynamic will be true also for the office and commercial segments, with Milan starting the new course. The city alone, after all, attracts half of the investments from companies in Italy, which, according to Nomisma, might reach 10 billion euro by the end of 2017.

“We’ve reached a turning point, or of balance, if we prefer, when after a phase of contraction we move to a phase of expansion”, stressed Elena Molignoni, responsible for the Real Estate Market Observatory of Nomisma. “Milan has anticipated this trend, but prices are rising also in the other cities such Florence, Bologna, Rome and Turin”.

The trend of the average return on rents is also interesting. In fact, rents are rising, confirming an increase higher than that of sales for houses, offices and shops.

The rent market is driven by short-term rentals, on high demand from workers and students. According to Nomisma, the market was less impacted by the effects of recession than properties were.

The increase in sales has been favoured also by the divestiture process of bad loans, particularly intense throughout 2017. However, the speeding up of this process might cause an increase of offer of distressed origin that risks having depressive effects, warns Nomisma. Also because of the absorption capacity of the offer, especially for corporate properties, is still limited, with consequent effects on prices.

Other interesting phenomena of the current market situation were covered by Fabio Guglielmi, from Santandrea Luxury Houses (that spoke about luxury properties in Milan and Rome), by Stefano Magnolfi from CRIF Rea Estate Services (that showed the impacts of the new European regulations in the matter of issuance of credit in the real estate sector), and by Simone Roberti from Colliers International (that updated on the market of corporate investments in Italy).

The topics covered during the discussion afterwards were interesting too, with particular focus on the theme “From building to context: Which economical strategy to follow?”, in which took part Carlo Maria Medaglia (head of the Technical Office of the Ministry for the Environment), Federico Testa (ENEA president), Franco Guidi (Assoimmobiliare and Lombardini 22), Filippo Pagliano (Studio Architettura Park Associati), and Gualtiero Tamburini (Quorum Sgr president, Gruppo Sorgente).

“The update of the real estate assets in the cities is a great opportunity for the country to grow again and reduce its huge stock of public debt”, observed Franco Guidi. “As Assoimmobiliare, we’re happy to announce that PIRs have been extended today also to the real estate sector, which will turn useful in the perspective of reshaping cities”.

“To support restoration interventions of whole buildings and apartments complexes”, has than noted Federico Testa, “There is now the possibility to use another instrument, namely the transfer of incentives for energetic upgrade (TEE and deductions for 65%) to third parties such as asset managers, funds, energy service companies (ESCO), and utilities providers” that will be able, in this way, to act on behalf of the residents, solving all the conflicts around decisions and starting works that will be advantageous for everyone.

“A new season of investments is starting for what concerns asset management companies and funds, not only regarding existing real estate assets but also regarding new development operations”, said Gualtiero Tamburini, “including in this category not only traditional properties but also infrastructures of various type such as power generation facilities”.

Source: Interniews

Translator: Cristina Ambrosi

The constant decline of house prices: waiting for the recovery

10 November, Home Rating

A constant decline in house prices, as Italy is still struggling to take off and the recovery is expected for next year.

The debate about the recovery of real estate continues. The various reports of the experts of the industry have often shown a climate of confidence amongst Italians who have resumed buying houses supported by a mortgage market offering very convenient solutions.

The experts predict the impending market recovery with a slight optimism and for next year the outlook is positive. For the time being, at least, we will have to stick to the data registered in the last quarter, showing an average price drop of 1.7%, which means 1,818 for Sq m, a 5.2% decrease compared to the same period of last year.

The recovery phase of Italian real estate is very difficult, so difficult that the country is the least dynamic in the Eurozone, in terms of sales. In the rest of Europe, the increase of real estate prices registered in the last quarter a variation of +4.4%, which is the average for the 28 countries of the European Union. The negative trend in Italy is mostly due to the heavy taxation on properties and the instability around occupation that certainly doesn’t encourage to commit to a very considerable expense for families.

At a national level, Molise is the most affected region by the difficult situation, placed at the bottom of the chart with -3.6%. The trend is negative also for Marche, with -3% and, surprisingly, Lombardy too.

In contrast, Sardinia registers a price increase of +0.6%. Liguria is doing well with a +0.4%, as well as Puglia (0.2%). As always, Liguria leads the chart concerning selling prices with 2,622 €/Sq m. Val d’Aosta (2,466 €/Sq m) and Lazio (2,429 €/Sq m) follow. In Molise, 998 €/Sq m are needed in order to buy a house; while in Calabria only 930 €/Sq m are needed. If these real estate quotations are disappointing for those intending to sell their house, they certainly aren’t for those who want to buy, favoured by the current situation.

Source: Home Rating

Translator: Cristina Ambrosi