Market Report Milan - Rome First Half 2019
THE LUXURY REAL ESTATE DOES NOT KNOW CRISIS: IN MILAN PRICES HIT €18,000 / SQM AND IN ROME €12,000 / SMQ
Published the Market Report produced by Engel & Völkers in collaboration with Nomisma: "Market Report Milan / Rome H1 2019"
The luxury real estate market in Milan and Rome knows no crisis. To say it is the numbers: just think that the prestigious residential market has reached important quotations, with peaks of 18,000 euros per square meter in Milan in the Fashion District and 12,000 euros per square meter in Rome in the historical centre. This is the picture that emerges from the "Milan / Rome H1 2019 Market Report" created by Engel & Völkers in collaboration with Nomisma.
The fragility of the Italian economic situation does not seem to compromise the ability to rise in the Italian real estate sector which, after the harsh crisis that hit it, is struggling to recover the lost positions. These evidences emerge both from the further expansion of the volume of sales and from the gradual improvement of the main economic indicators of the sector, especially in the main cities, first of all Milan - declared Luca Dondi dall'Orologio, CEO of Nomisma. In particular, the slowdown in economic growth and the prospect of stagnation have so far not penalized the dynamism of the prestigious markets of Milan and Rome.
Milan: growing investment in quality bricks ahead of the 2026 Olympic Games
In Milan, a veritable race towards high quality housing is taking place, induced by the perception of a forthcoming price increase and the obtaining of credit at particularly advantageous rates. The interest of investors is growing, as well as in the Historic Center, for buildings near university, hospitals and headquarters of large companies. The assignment of the 2026 Winter Olympic Games has given euphoria to the investors whose target is represented by the zones that will be connected by the new transport network.
The real estate market appears to be in good health and is the first nationwide market for dynamism, absorption rates and price recovery. The transactions increased by 3.4% per year in the final 2018, reaching around 24,500 transactions for a total turnover of 5.9 billion euros. The figure for the first 2019 confirms the growth trend with + 8.5% per year. Central and prestigious locations are no longer the driving force behind the recovery, since the recent expansionary cycle has now spread to all urban areas.
Thanks to the strong appeal for investors and buyers, the Milanese market remains highly liquid, with average placement times of 1-2 months for medium-sized buildings (less than 80 square meters), between 1 and 3.5 months for cuts large (80-160 square meters) and 2-6 months for very large ones (over 160 square meters). In fact, for the most valuable properties, new or renovated, the sale and lease times are almost immediate.
"In the first half of 2019 the positive signs of the previous semesters turned into concrete economic effects, thanks to the increase in exchange values in the city center, with particular appreciation for some specific areas of greater interest - said Roberto Magaglio, License Partner at Engel & Völkers Milan - Process Engine, the qualified demand for buildings in purchase is confirmed, constantly increasing and with the prospect of further intensification. The offer is still stationary and not adequate for the number of units available on the market and for the objective characteristics that do not fully satisfy the requirements of potential buyers ".
Prices grow in all areas. The range of average prices ranges from 8-14 thousand euros / sqm for buildings renovated to new and from 6-9 thousand euros / sqm for those to be restored. The highest prices reach up to 18 thousand euros / sqm in the Quadrilatero and in Brera, up compared to the previous half year, and to 16-17 thousand euros / sqm in San Babila and Castello-Foro Bonaparte.
Rome: increasing demand in the historic center for small-medium buildings
Rome is the first Italian market for number of sales and continues to grow. The 32 thousand sales in 2018 (+ 3.4% per annum) generated total revenues of 7.3 billion euros. The expansionary trend is more than confirmed in the first half of 2019 (+ 6.9%).
In Rome, the demand for investment is increasing, especially in the Old Town and concerns small-medium-sized buildings and prestigious buildings, with a view of monumental areas. Outside the historic center, the demand for the purchase and rental of a first home in greener residential neighborhoods remains well supported by the public transport network and close to services.
In the segment of value, the most dynamic areas for volume of sales and leases are, in addition to the Historic Center, always a privileged target area for investors, including Parioli, San Giovanni and EUR. There was an increase in the rental offer in the Trionfale-Vaticano, San Giovanni and EUR districts, against a sustained demand. The demand for value requires in Rome, and particularly in the Historic Center, an important position and view, high floor or attic, terraces, well served position, quality of the building and presence of garage or parking space. However, the value offer that meets these criteria remains numerically inadequate compared to the requests. The scarcity of the first objects therefore makes it possible for these to be placed on the market in a few weeks.
Helio Cordeiro Teixeira - Managing Director at the Engel & Völkers Market Center in Rome: “In the first half of 2019, the trend in demand has not undergone substantial changes compared to the previous half-year and prices have remained stable with slight signs of decline in some areas. The demand turned out to be lively, although not always constant due to the factors of uncertainty internal to the country and to the city, also in consideration of the international situation tending to instability risk "
COMMERCIAL REAL ESTATE IN MILAN AND LOMBARDY
Published the Commercial Market Report created by Engel & Völkers in collaboration with Nomisma: "Market Report Milan and Lombardy Commercial H1 2019"
On the commercial market in Lombardy, the recovery of the exchanges that exceeded the 2011 level in Milan continues. Lombardy. With 2,866 regional office transactions, the sector recorded a growth of 2.4% compared to 2017.
Except for Milan, which shows a positive half-year trend in almost all sectors, and for Brescia, which maintains strong stability, the price and rent situation in the target provinces is not entirely positive. The six-monthly change is slightly negative in Como, Bergamo and Monza-Brianza, which after Milan and Brescia, represents the province with the highest price range (1,410 - 1,735 euros / sqm).
Gross average rental yields are higher in Varese and Bergamo (both 5.3%). Excellent returns in terms of structured offices are recorded in the Milan area (7.3% -7.8%) * and Monza (6.5% - 7.5%).
The outlook of Engel & Völkers Commercial for the second half of 2019 confirms for Milan all the growing market indicators with sustained demand and rising prices and rents. For the Lombard provinces as a whole the values are expected to be substantially stationary with stable or growing demand. Expected prices and rents to fall in Monza for offices and in Varese for stores.