The brick is no longer a safe haven. With the prospect of green investments, the real estate sector slows down. Monetary policy is also an accomplice in both Europe and the United States. To complicate the situation, there is also the negative sentiment coming from the Far East with the bankruptcy of Evergrande and the crisis of Country Gardentwo giants of the sector.
In Italy there is a slowdown in sales
High rates and limited liquidity are changing the game in the real estate sector. In particular, in 2023, in the eight major metropolitan cities the market real estate residential recorded a slowdown in trades total (new and used) by 14.2% compared to the previous year (approximately 105 thousand estimated transactions).
According to the analysis of Abitare Co. – a real estate brokerage and services company specializing in new residences -, in fact, if we compare the data with the pre-Covid period (2019), the drop is much more contained (-5.7% ). Furthermore, already from the end of the third quarter of 2023 an improvement in the sales trend was recorded compared to the first part of the year. Considering the total turnover, in 2023 it exceeded 43 billion euros (+0.8% on 2022), with Rome in first place (15.8 billion euros).
New buildings resist
The new buildings residential in the eight metropolitan cities, with an estimate of around 12 thousand transactions in 2023 (the national figure is estimated at around 60 thousand sales), have resisted better than the used market, marking a smaller decline in 2022 (-4.6%) and remaining in line with pre-Covid data.
“The supply share of new homes compared to the total for sale always remains very low – he states Giuseppe Crupi, CEO of Abitare Co.–. On average, in the eight metropolitan cities they represent only 8.2% and also for this reason, in the face of a drop in sales, prices continue to increase”.
It didn’t helpinflation (+5.9% annual average) which contributed to the growth in costs of areas, materials and contracts in general. At the end of 2023, the prices of new homes thus marked, in the eight cities, an average increase of +3.9% compared to 22nd, bringing the average price to 4,919 euros per square meter.
Similar situation from Rome to Milan
Regarding the sales of new homes in 2023 in the eight metropolitan cities (-4.5% on 2022), we can see how the most marked decline was recorded in Genoa and Rome (both -6.2%). Followed by Bologna (-5.8%), Turin (-4.9%), Milan (-4.5%), Naples (-3.9%) and Palermo (-3.3%). Florence also closed with a negative sign, but with a much more contained value (-1.8%).
Prices rise
But if sales dropped, what happened to the prices? On the contrary, average prices increased in all the main cities analyzed (+3.9% compared to 2022), reaching a general average value of 4,919 euros per m2, but with clear differences between central areas (7,150 euros per m2). , semi-central (4,625 euros per m2) and peripherals (3,144 euros per m2).
Milano e Firenzewith +7.7% and +5.9% respectively, are the most dynamic cities while a Bologna prices grew by only 0.6%. The Lombardy capital reached 7,100 euros per square meter, a figure influenced both by the cost of building areas and by the increasing values both in the semi-central and peripheral areas where today the maximum average value exceeds 5 thousand euros per square meter. Roma it cannot keep up with Milan and in fact its average sales value in the city stops at 6,400 euros per square meter. The gap between these two cities and the remaining six examined is very high. In the other cities in Florence the average price is 5,400 euros per m2, per Torino of 4,500 euros per m2, per Genova of 4,450 euros per m2, in Bologna of 4,400 euros per m2, in Napoli of 4,100 euros per square meter. The “cheapest” is Palermo with its 3,000 euros per square meter.
What is happening
Sales prices were not only affected by the pressure of request on a market that offers little, but all the costs linked to a development operation, from the purchase of the areas to the planning, to the municipal charges, to the costs for the construction of the buildings. Compared to a used home for sale, the components that determine the final price are many, and this is obviously the reason that leads prices to remain in a growth territory.
They get longer sales times above all due to a question of delays in placing new products on the market. The average is around 4.7 months, ranging from 4 months in Milan and 4.2 in Palermo and Bologna up to 5.7 in Genoa and 6 in Naples.
The commercial sector worries the banks of the Old Continent
In the latest analysis by Aew, one of the main asset and real estate investment managers, it predicts 42.5 billion euros in defaults on real estate loans. This huge amount of risky loans could turn into 14.5 billion euros in losses over the next three years.
On the other hand, according to experts, the sudden drop in inflation and the prospect of a decline in rates, with a beneficial effect on mortgages and related charges, should reactivate the commercial segment as early as 2024 and with an acceleration in 2025.
Meanwhile, the Country Garden case explodes in Asia
After the collapse of Evergrande, it is now the turn of Country Garden which has been overwhelmed by the non-payment of a loan worth 205 million dollars. Already in October the company had not repaid a bond coupon of 15 million dollars. Hence the birth of groups of bondholders set up ad hoc by international investors and fund managers, intent on protecting their rights in every way. Enough to scare investors around the world.
(Teleborsa)