Recent official statistics point to continuing, slow improvement of the Italian property market.

On 21.11.2018 Banca d` Italia (the Italian central bank) published a business survey (Sondaggio congiunturale sul mercato delle abitazioni in Italia) of 1,441 Italian estate agents.

Agents reporting price reductions have reduced (down to 16.3 % from 19.5 % of July 2018), while there appears to be an increase in the number of estate agents reporting substantial stability of residential property prices. This is a positive outlook for the property market that continues to spread, especially in the short term.

Unfortunately, while the number of residential property transactions has increased, there has also been an increase in the average discount on asking prices, up to 10.8%.Average time to sell a property and average discount on asking price

Average time required to sell a property and average discount granted on asking price (Source: Sondaggio congiunturale sul mercato delle abitazioni in Italia – Banca d` Italia):

 

Blue: average time (months) between appointment of estate agents and sale.

Red: (right scale) average discount granted on asking price.

However, these data, as all statistics must be taken with a pinch of salt. Recent independent statistics  (Scenari immobiliariNovember 2018) confirm that in Italy only 55% of residential property transactions are completed with the assistance of estate agents.

The advance of the internet and the problems experienced by the Italian property market have resulted in a large proportion of Italian property transactions completed without formal estate agents, thus resulting in saving for both the vendor and the buyer (in Italy both parties to a property transaction pay commission). As a result, Italian estate agents have had to adapt, and independent statistics show that on average only 75% of their income originates from intermediation. A growing proportion of Italian estate agents arises from valuation and consultancy / advisory services.

On the 7th December 2018, the Italian land registry (Osservatorio del Mercato Immobiliare – Agenzia delle Entrate) published the Italian residential property market statistics for the 3rd Quarter of 2018 – “Residenziale – Statistiche III Trimestre 2018”.

In a general picture of economic stagnation, with unemployment at 10.6% and with reduced consumer confidence, the Italian property market shows a 6.7% increase in the number of property transactions, over the previous year. This is a positive trend present for almost three years now, with different rates for different parts of the country: + 13% in the North-East, +7 in the Central areas, + 4.7 in the North-west and + 3.2% in the South. The total surface of the average property sold in Italy is 107 square meters.

Sales of properties with a surface area ranging between 115sq.m. and 145 sq.m. show the highest (+ 9.7) increase in this quarter. Generally, the number of properties sold is higher in the small towns/villages, and lower in the main towns.

If the eight main cities are considered, only Milan shows a reduction in the volume of sales. The number of property sales has grown in Rome (+3.4%), Turin (+4.5%) Naples (+3.6%), Genova and Florence (+7.2%), Palermo (+8.5%) and incredibly, Bologna with an increase of 23.7%.

Cellars, lofts and other subordinate parts of residential units. The sale of the subordinate units (Pertinenze) shows a + 9.2% average annual increase in the volume of sales. The highest level of sales of these subordinate units was recorded in the North-east (+19.7%) and on the islands (+16.7%). On average, property sales in smaller towns tend to be more active than in main Italian towns.

Garages and parking spaces recorded a +5.3% in the volume of sales when compared with the third quarter of 2017. Unfortunately, property prices are still subdued.

The increase in the number of property transactions has not converted into an increase in property prices, however, there is a noticeable general upward trend of the Italian property market. In the (not always real) gloom and doom, there are opportunities for savvy property investors.

Dr. Claudio Del Giudice – copyrights reserved – 24.12.2018