Milan: Stable price development in prime locations and trend towards suburbanization

The recently published “Market Report for Residential Property in Milan second half year 2020” by Engel & Völkers, underlined substantial levels of activity in the Milanese real estate market in the second half of last year. In spite of the persistence of the pandemic, which manifested itself with particular vehemence in the region of Lombardy, a higher number of real estate transactions have been registered compared to the corresponding months of 2019. “In Milan we have seen an inclination towards a more advantageous relationship between property size and price, and the presence of green areas. Buyers are considering less central areas and move towards peripheral districts, well-connected to the city,” says Roberto Magaglio, Licence Partner of Engel & Völkers Milano. “Demand is still largely concentrated on homes that have been renovated, especially new residential developments in peripheral areas and with outdoor spaces,” he explains. Italy reached one of the highest numbers of sales growth of the Engel & Völkers Group in the Residential division, with a rise in revenues of 5.2 percent compared to the previous year.

Hamburg - In the West of Milan lies this fully renovated flat for 1.25 million euros. Located in the area of Wagner, the city center such as the Duomo Square is easily and quickly accessible by public transport. The apartment boasts three bedrooms and two bathrooms over approximately 180 square meters and a 44 square meter terrace.
(Image source: Engel & Völkers Milan Historic Center)

Demand for properties in suburbs with good access to the center

As the realization that the pandemic will run its course for a longer period of time, factors such as the request for housing comfort with green and outdoor spaces, and a location with good connections to the city center, have become essential and increasingly decisive in the research and selection of a new home. “In 2020 we have noticed two main trends: a tendency to move from the center towards the outskirts, where properties are well connected to the center and with a greater amount of living and outside space, as well as the search for new or recently renovated accommodation,” Roberto Magaglio explains. The most expensive home currently in the portfolio of Engel & Völkers Milan is a stunning mansion in one of the most exclusive addresses of Porta Venezia for 7 million euros. Despite the need for housing with large green areas in the outskirts, prices in the city center have remained stable on a high level. Brera and Quadrilatero are among the most popular areas of the historic center, where top values for new and renovated apartments reached up to 18,400 euros per square meters (a slight increase compared to 18,000 euro per square meter in the first half of 2020). Even though Italy has been severely affected by the pandemic, Engel & Völkers Milan was still able to carry out business activities thanks to the advanced digital technologies and the virtual visits, which have led to real estate closings.

Outlook: Real estate prices remain unchanged at an elevated level

Engel & Völkers assumes that the prices will remain high in 2021 while the number of owner-occupied homes is expected to grow. “We must hope that the pandemic will be kept under control and that the vaccination plan proceeds swiftly. We believe 2021 is certainly going to be better than 2020 in terms of real estate transactions and probably even superior than 2019. Once businesses, education, events and tourism will resume again, the number of investments and rentals will increase too,” Roberto Magaglio concludes. As soon as these activities will recommence, the number of international clients will consequently also increase.

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