Words by Carla Passino
Unless the economy deteriorates dramatically, the Italian property market is likely to stabilize on 2009 levels, with top end homes performing well while those at the lower end experience a greater drop in prices and sale volumes.
A stable market with a minuscule decrease in prices. This, in a nutshell, is the Italian property forecast for 2010, put forward by estate agent conglomerate Tecnocasa.
Examining the sale volumes and price variations that took place in 2009, the Tecnocasa researchers concluded that the Italian market saw a wobble in the first months of last year, when uncertainty over the economic outlook was rife among buyers and sellers. With the onset of Spring, however, property demand picked up in both the investment and residential sectors. At the same time, though, a cautious approach by mortgage lenders restricted access to funding, thus limiting actual sales.
Looking ahead, the Tecnocasa researchers believe that, so long as Italy’s economic performance remain similar today’s while the mortgage industry’s attitude continues to be prudent, this year will see sales stabilize at 2009 levels, with about 600,000 homes sold across the country.
Prices will still decrease, according to the study, but by a minimal amount, in the region of 1% to 3%. Much like in 2009, however, the market will be segmented by quality brackets, each performing at its own speed. With limited access to mortgages, cash buyers, or those who have the right credit profile to secure funding, will have enough choice to opt for homes that offer good value for money. So anything that falls in this category is likely to sell more quickly and easily. In particular, top level properties will continue to do well, as they did in 2009. Likewise, homes situated in city centres are likely to hold their value — partly because their supply is short, and partly because they tend to attract investors, as well as residential buyers.
By contrast, the bottom end of the market will probably see bigger drops in prices, as the typical buyer for this kind of home may find it hard to secure a mortgage. For the same reason, metropolitan outskirts may also experience a decrease in values, with the exception of those areas that have perhaps seen an improvement in infrastructure or urban requalification projects.
Looking specifically at individual locations, the Tecnocasa researchers expect the market to do best in a handful of provincial capitals across the country, such as:
- Lecce, Avellino, Macerata and Savona (where prices are expected to go up by 1% to 4%) and
- Cagliari, Latina, Parma, Pavia, Rimini, Taranto, Udine, Verona and Bergamo (where value increases are likely to be between 0% and 3%).
A couple of metropolitan areas are also set to hold firm or increase:
- Bari (2-5%) and Turin (0-3%), although neither city centre is expected to do particularly well (Bari -3 to -1%, Turin -2% to 0%).
At the opposite end of the market, the outskirts of:
- Palermo and Genoa are expected to do worst, with decreases in the region of -5% to -8% and -6% to -9% respectively.
