Despite concerns about war and inflation, the residential market is a favorite among institutional investors. Not surprisingly, an estimated 135 billion euros of investment in residential real estate in Europe in the first half of 2022, up 7 percent from last year. Household demand remains high throughout Europe, which drives up purchases, sales, and listings in all countries. Even in Italy, Milan ranks at the top of the most popular cities in our country.
The data has emerged within the Osservatorio abitare in Europa made by Scenari Immobiliari in collaboration with Abitare Co. and presented during the Forum dell’abitare 2022 conference, which shows a “partial effervescence of the housing market,” as pointed out by the president of Scenari Immobiliari,
Mario Breglia.
From the concept of home to the concept of living
At present, the concept of a home goes into the background. The underlying issues are now related to dwelling. “Today, home is only one aspect of the theme of dwelling. What matters is the fact of living inside the house, working inside the house, spending more and more time inside the house, with great attention being paid to issues related to the neighborhood, services, and the transformation of cities,” Breglia explained
Europe’s residential real estate buying and selling and price trends
“The year 2021 was an anomalous year of strong rebound, in the economic and real estate systems, with numbers up 25-35% in terms of buying and selling a bit all over Europe. The first quarter of 2022 continued this trend with a 20 percent increase, while the second quarter, on the other hand, as a result of the war in Ukraine, interest rate tensions, and concerns about a possible rise in inflation, always saw positive numbers but down from Q1,” Breglia explained.
What has resulted? At the aggregate level, the first half of the year saw a positive change across all European countries except England, which had an increase of around 40 percent last year. Thus, buying and selling in Italy rose 12.5 percent, Spain 22 percent, Germany 9.9 percent, and France 7.8 percent.
“Supply, however, is inadequate everywhere in terms of quality and quantity,” Breglia pointed out. “Rising raw material costs are slowing but not stifling demand. Price pressure in some countries (not Italy) is approaching a “bubble.” For their part, large investors are also increasingly present in the residential income sector. A sector where unfortunately our country is almost absent although there is an estimated demand of at least one million dwellings in metropolitan areas alone.”
Focus on Italy: prices return to rise in residential
“After almost ten years of falling average prices, we are in an upward phase in Italy. Nationally we are at +2.5 percent in one year (June 21-June 21, with the new exceeding 5 percent and all large cities showing increases above the Italian average. We are in a phase of rising real estate prices,” Breglia explained. For his part, Giuseppe Crupi, CEO of Abitare Co. added that “the Italian residential market is a very liquid market that at the moment is not too affected by the context that surrounds it, although it is strongly affected by it. Just think of the effects in the medium term of the rise in rates applied to mortgages.”
The reality of Milan and other cities in Italy in the residential sector
In Italy, among the big cities, Milan stands out with a 16% jump in purchases and sales, once again confirming itself as the metropolis with the most dynamic market. Palermo also did well, putting in a plus 13% over the first half of 2021. Double-digit increases also for Bologna, Venice, and Florence. In Rome, the increase in buying and selling is just under 10 percent. The capital is the city that attracts the most investors after Milan, but on the residential front, it still struggles to follow the performance of the Lombard capital. Weighing on this is the pace of administrative procedures that affect the time it takes to complete interventions. In terms of prices, Milan appears among the most dynamic (+4.7 percent), only behind Palermo (+5.1). It is followed by Florence, with 4.1 percent growth, and Rome and Genoa, with +3 percent.
Residential: the most dynamic neighborhoods
In ranking the ten most dynamic neighborhoods for price growth in the first half of 2022 compared to the same period in 2021, Milan places as many as three (Feltre +10.7%, Ronchetto +10, and Montevelino +9.2).
Leading the way is Rome’s Piazza Navona (+16.9%), followed by Palermo’s Fiera district (+15%) and Naples’ San Lorenzo district (+11%).
