Last year, Italian housing market was stable. In details, there was a relevant increase of demand but, at the same time, less residential housings. However, within such uncertain landscape, COVID-19 impact shall be assessed. In fact, in the first trimester Italian house market registered a slowdown in terms of mandate for selling or renting. According to experts, due to COVID-19, people has decided to postpone future dwelling purchase.
The most evident effect of COVID-19 is prices dumping due to lack of demand. In fact, during the first trimester, dwelling sales prices fell by around 4%. On top of that, COVID-19 caused the renegotiation of numerous preliminary contract due to the unexpected change in buyers’ economic condition. The uncertainty of the market also registered a certain unbalanced between lack of purchase proposal (due to high prices) and purchase offer which were too low.
Within the last 20 years, Italian Housing Market has been characterised by strong growth followed by inevitable decline due to EURO currency crisis between 2011 and 2014. After that, further internal issues brought the market down by 3,9% from 2015 and 2019
Milan is the most expensive city in Italy, with the average price of new homes rising to €5,600 (US$6,170) per sq. m. during 2019. In Rome, Italy’s capital and largest city, new home prices stood at €5,160 (US$5,685) per sq. m.In other major Italian cities, Florence new home prices increased 2.1% to an average of €4,950 In Turin, the average price of homes rose by 1.4% to €4,600 per sq. m.In Naples, Italy’s third biggest city, home prices increased by a miniscule 0.5% y-o-y to an average of €3,950 (US$4,352) per sq. m and by 2.1% to €3,030 in Palermo.
Based on this data, It is possible to expect a further reduction of sales prices with related reduction of purchase offers. Within such unfavourable context, wealthy individuals shall wait the best moment to place a purchase offer with the best market condition.
Should you need any assistance or consultancy when dealing with property purchase in Italy, please do not hesitate to contact us. VGS lawyers professionals are perfectly able to follow you during the process. On top of that, VGS lawyers is able to offer notary services which, for property purchase, are mandatory.