The pandemic hasn’t yet had a major impact on house prices in Italy, studies show, but it is changing the market in some ways. Here’s what could happen next.
There has been much speculation about how the Covid-19 crisis and Italy’s three-month lockdown will affect property prices in the country – though experts have warned since April that buyers can’t expect to see the market flooded with bargain properties anytime soon.
In fact, a new report released by Italian property portal Idealista shows that prices on average have in fact increased slightly during the shutdown.
The study showed a slight increase of 0.3 percent in May compared to April – when it had fallen by -0.1 percent. The three-month trend showed an overall increase of 0.6 percent.
The picture also varies significantly between regions and towns. The study recorded average price increases in 63 of the 110 Italian towns and cities it looked at. Six saw no change, while prices elsewhere had fallen.
In the economic capital Milan, prices dropped by 0.8 percent in May, after starting to fall in April.
There have been reports that many Italian house-hunters are now abandoning the cities and looking for rural properties following the Covid-19 outbreak. However, the Idealista study found house prices continued to rise in most other cities – including by three percent in Naples, and 1.2 percent in Bologna and Turin.
However, despite small fluctuations, average house prices in Italy have been dropping since 2012. Since May 2019, the average property price has fallen by -2.1 percent overall year on year, the report showed.
But it may be too early yet to judge the true impact of the pandemic on property sales.
“Covid-19 has understandably changed market conditions, but prices are stable at the moment,” Stated Vincenzo De Tommaso, Head of Idealista’s Studies Office. “After forced inactivity due to the virus, sellers are waiting to see how buyers who visit their homes will behave and what offers they receive.“
“There is no lack of demand, but in order to regain the pace of sales, perhaps it will be necessary to adapt prices to market circumstances.”
Photo: Unsplash/Cristina Gottardi
Italy’s property market ground to a halt under the strict lockdown. Tens of thousands of property sales had reportedly been cancelled by April, often due to job losses or people changing their minds for other reasons connected to the crisis, estate agents said.“The real estate market is deeply linked to the trend in employment,” Italian financial consultancy firm Nomisma said in its most recent report on the Italian property market. “The more unemployment and layoffs increase, the fewer families will buy houses.” The Bologna-based research company found that the Italian property market started the year in a very difficult situation, with a drop in turnover of €9 billion compared to last year’s results for the first quarter. Estate agencies were allowed to reopen from early May, though many say restarting has been gradual, particularly for italy’s international market as some travel restrictions remain in place. Many prospective buyers hoping to buy a property as a holiday home or investment have been watching the market closely to see if their money may go further following the shutdown.
However, Italy’s international market, geared towards retirees and second-home owners, is expected to be more resilient than the national market overall. “From the middle of April, I can say the number of enquiries we’re getting has increased and is now almost the same as the pre-Covid 19 situation,” said Sara Zanotta, founder and director of Lakeside Real Estate in Lake Como. “Buyers who cancelled their trips and meetings with us are now trying to reschedule for July-Septemb
Agents say they’ve had to find new ways of working, which have often turned out to be a bonus for clients based abroad.
While visiting a property in person is now possible again, agencies say many clients – both buyers and sellers – now prefer virtual tours. Many are now providing this service for the first time.
The crisis also appears to have changed buyers’ priorities.
“I can tell you that most people now are looking for properties with a large internal space, and an outside area,” said Zanotta. “I think this period showed a lot of people how important these requirements are.”
Zanotta explained that, for the international market at least, “there’s no reason why prices should be reduced.”
“I think prices are going to stay stable – except for in some internal area of Italy, where the market is pretty much for Italian residents only,” she added.
“At Lake Como, I can state that prices are still the same. Importantly, people who come in Italy, and to Lake Como especially, are not looking for super-bargains or take advantages of a bad economic situation.”
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