He annual report on the residential real estate market Italiano, published by the Tax Agency and ABI (the Italian Banking Association), certainly contains a series of numbers that in the first instance reject those who have no passion for statistics, but which, looking a little carefully, help to understand because Milan is a story in itself on the national stage. The publication of the 2022 update therefore allows us to make some considerations.
Let’s start with sales.. Last year In Italy, 784,486 homes were sold, with an annual increase of 4.7% compared to the previous year. 2.27% of residential assets are traded. In our city, 28,595 exchanges were carried out, with an annual increase of 6.1% and the transactions involved 3.48% of existing homes. Figures that would indicate a market with better health than the national one, but this is not the case. The overall increase in sales is due to boom in the first quarter of 2022largely derived from the carryover of practices from the end of 2021: from January to March, in fact, the increase was 36%. In the following three quarters, Milan’s data was worse than nationals and in the fourth quarter of 2022 they registered -4.6% compared to -2.1% of the Italian average. if we go to comparison between the trend of sales between the capital of Milan and those of the municipalities of the urban beltwe observe that the latter grew by 8.8% while the rest of the province did worse than the capital (+1.3%). Those who are leaving Milan, therefore, try not to leave it.. In recent weeks we have made a price comparison between the periphery of the city and the interior, showing that only in some cases (San Donato, Segrate, Sesto San Giovanni and, the only municipality that is not in the first belt, Arese) there are prices comparable to those in the least served areas of the capital, where prices obviously benefit from a kind of “Madonnina discount”.
A peculiar feature of Milan is made up of size of the apartments involved in the transaction: the Italian average is 110.7 square meters, that of Milan 80.4, or more than 30 meters less. In the municipalities of the first belt it rises to 89.2 meters, in the rest of the province to 95.4, practically a quarter more than in the capital. To have another term of comparison in Rome the average area is 93.1 meters. In Milan in particular, the proportion of purchases related to homes less than 85 meters high represents almost two thirds of the total, in the Capital they are only half. And despite the fact that almost 12,000 more sales were registered in Rome than in Milan, the total sales turnover in the two cities is almost equivalent. In our city it is estimated at just over 10,000 million euros, compared to 123,400 million at the national level. It means that sales in the city represent more than 8% of the total while houses in Milan are around 2% of the Italian total.
The slowdown in the market already evident at the end of last year and which is likely to get worse (for the certification it will be necessary to wait a few weeks, when Rentas updates the sales data to the first months of 2023), it has a clear person in charge: the increase in the cost of mortgages. From the Revenue-ABI report it is possible to highlight the abysmal differences that exist between Milan and the rest of Italy in the approach to financing. On average for the country, the paid-up capital in 2022 amounted to 138,200 euros for operations, the province of Milan is online, settling in 141,200. In Milan, the capital, the figure rises to 241,900 euros. At the current exchange rate, this means spending 1,272 euros per month on a 25-year mortgage compared to the national average of 728a difference of more than 500 euros, which is a very high barrier to entry: to buy with the average mortgage, you need more than 100 thousand euros in cash and at least 3,500 euros of family income. In Milan, however, the proportion of cash purchases is higher (often derived from the exchange of another apartment) and the higher the cash participation in the price when applying for the mortgage.
In the end, location dataabout which, however, it should be noted that they obviously only take into account registered contracts, they are therefore excluding not only unreported rentals, but also leases with a duration of less than 30 days and for which there is no obligation to register. Regarding ordinary contracts with a duration of 8 years (4+4 with almost automatic renewal) In Milan, 35,029 were registered, while there were only 1,922 contracts with an agreed rate of five years (3 years + 2 renewals).. In Rome there were 12,568 ordinary contracts, 32,265 concluded. Translating: in Milan, out of a hundred long-term contracts, there are 5 agreementsin Rome there are just under 70. The explanation is very simple: those who agreed to the rentals in the past (owners, tenants, City Council) have defined figures totally out of reality and despite the attractive tax (flat coupon at 10%, reduced Imu by 25%) and the shorter duration, very few owners consider this form of contract convenient. In the capital, on the other hand, the agreed rents are very close to those of the market. And the Milanese numbers are laughable if we refer to a specific contractual case, that of subsidized rentals for university students. Last year 771 were stipulated in Milan, and we doubt there are any private owners among the owners. Now there is talk of a new specific agreement on student rentals in Milan, but without acknowledging the reality, that is to say, that it is necessary to establish rentals that net of taxes yield more or less as much as free ones after taxes, there is a risk that the agreement remains on paper.
