Residential and commercial real estate properties will be the first to change their price trends in 2014. This is the prediction from European Outlook 2014, recently published by Scenari Immobiliari, an independent research group in the Real Estate sector. Indeed, according to their investigation, next year house prices will return to growing, even by a shy +0.2% compared to 2013, and the corresponding estimate for commercial space is of +0.7%. The latter is also expected to have a positive sign for the current year (the estimate is +0.2%).
The Italian real estate outlook does not seem to stray far, at least from the trend lines, of Europe’s principal countries, despite clear differences in the recovery rates, whereas it seems better than the situation in Spain. In fact, according to Scenari Immobiliare, Britain and France will see a recovery for the prices of the two above mentioned sectors, whereas Germany is an entirely different topic, where the entire sector is already recovering from the prices perspective, registering estimated increases ranging from +0.3% for the industrial to +3.6% for the residential this year, and variations that should range between +0.5% for the industrial to +3.5% for the residential in 2014.
Returning focus to the Italian market, the investigation underscores that in 2013, the residential sector, which accounts for more than three quarters of the comprehensive turnover (and for which the estimates are of +0.6% to 113.5 billion Euros in 2013, and of +1% in 2014), is “still weak”: the sales and purchases are still diminishing even if there are some areas that are registering modest increase. Over all, however, prices in 2013 are expected to drop 1.8%, despite heterogeneous situations in the various areas and urban centers; but the expectation is on a turnabout in 2014, if “slow and moderate” one, based on partially on the fact that the abolition of the property tax for primary residences (the so-called IMU) will allow the medium to low level residential real estate market to breathe. In contrast, for structures dedicated to the tertiary sector and offices, as well as and industrial spaces, 2014 will bring a reduction of prices, although smaller than the one from the current year (-1.2% and -1.5%, respectively) as a result of the pressure from a weakened labor market, from the renegotiation of contract by companies in the restructuring or reorganization phases, and by the still uncertain estimates regarding consumption and industrial production. Scenari Immobiliari’s “view” of 2015 is a progressive price increase for the residential, a stabilization in the office and commercial sector, and a new decrease in the industrial.
Over the past seven years, the research indicates – the Italian real estate market has registered a decrease in nominal prices ranging from the 6% for offices to the 16% for the industrial segment. The counter trend is represented by the +5% in nominal values between 2007 and today for commercial space. In real terms, however, the outlook changes significantly, ranging from the -10% for commercial to the -27% for industrial, to which one must add the -22% for residential and the -18% for offices.