In the wake of the global financial turmoil, the Italian property market is proving more resilient than those in other developed economies, with an estimated turnover growth of 0.9% in 2008
When it comes to the housing market, Italy is weathering the international credit crunch better than many other developed countries. The news come from Italian property intelligence company Scenari Immobiliari, which compared the Italian market with the other four biggest economies in the European Union—Britain, Germany, Spain and France.
“A year of living dangerously” is how Scenari immobiliari summed up what happened in 2008 across propety markets in Europe, where turnover for the top five economies (Germany, France, UK, Italy and Spain) declined by 0.4%.
Although Italy too experienced a contraction in sales volumes this year—a report by Italian estate agent conglomerate Tecnocasa, released last Friday, highlights a reduction in demand, an increase in supply, longer sale times and greater negotiating edge for buyers as the key elements of the first semester of 2008—the country nonetheless saw an overall growth in market turnover of 0.9%, against increases of 0.7% in France and 0.5% in Germany, and declines of 1.1% and 4.7% in the UK and Spain respectively.
“In Italy, the market turnover is close to 128bn euros—about 0.9% higher than last year,” states Scenari Immobiliari. “The drop in residential sales volume was offset by average prices that remained stable. Values declined only in big cities. The industrial property sector has recovered and the office one has improved. Large scale retail is doing well.”
Looking forward, the property market in the top five EU economies should bounce back a little, particularly after the first quarter of 2009, according to Scenari Immobiliari. Growth prospects for next year are of 0.5% in overall turnover across the top five EU countries —and once again Italy should perform better than others. Scenari Immobiliari expects Italian turnover to grow by 1.6% next year, second only to Germany’s 2%.
Tecnocasa too sees some encouraging signs for the future. While it estimates that sales volumes and prices will both see a decline in coming months, particularly for low standard properties in urban outskirts, it also reveals that, in the last six months, demand, particularly in big cities, has shifted towards bigger properties with four or five rooms; that, in July 2008, buyers’ budgets clustered in the €249,000plus bracket, in an upward trend since the beginning of the year; and that, unlike the end of last year, sellers are now more willing to revise downwards their initial asking price. As a result, prospective buyers, though cautious and selective, may well come to the market with renewed confidence because greater property supply, and the awareness among vendors that changes are taking place in the market, will allow them to have a far greater negotiating edge.
