Italy's residential real estate imports: a downturn in 2023?

The number of property auctions in Italy continues to decline: in the third quarter of 2023, 114,846 auctions were registered, 21% less than in the third quarter of 2022 (144,731) and even 38% less than in the same period of 2019. This drop is fully in line with the 21% drop already recorded in the second quarter of this year. Such data is contained in the latest report from Reviva.com, a company specializing in revitalizing property auctions.

"The forecasts made in the previous quarter have now been confirmed," commented Giulio Licenza, CEO and co-founder of Reviva. - "By the end of 2023, we expect the number of auctions to be between 150,000 and 160,000. After several years of declining nonperforming assets and declining defaults, analysts are forecasting, albeit to a lesser extent than originally projected, a new increase in nonperforming asset inflows due to changing economic conditions. Based on these forecasts and the timing of registration procedures, we expect a new slight increase in the number of registered procedures already by the end of this year, which will subsequently lead to an increase in sales volume based on the timing of sales of the various vessels. "

The total value of minimum bids at property auctions also fell to €13.5 billion, down 30% on the same period last year.

With regard to the types of property auctions, 35.3% are for non-resident properties, 53.3% for resident properties and 11.4% for land. These numbers are generally consistent with the historic composition of the properties in the auction. The average price of resident properties at auction was €87,175, non-resident properties €170,724 and land properties €94,438. Here too, there is consistency with historical values for the different types of properties, with the exception of land, which declined compared to the previous year (119,000 euros).

With regard to geographical distribution, the North of Italy ranks first with a share of 33.2% of the procedures, followed by the Center with 25.7%, the South with 24.5% and the Islands with 16.6% in last place. This trend has continued since 2019, when the north's share was 43%, dropping 23.5% from 2019 to today in favor of an increasing share of the south and islands. This split is due to historical differences in the timing of completion of procedures in the courts.

The number of telematic sales also continues to increase with 40%, up from 37% in the previous year, while only 33% went mixed and 27% at the seller. This trend is not favorable because purely telematic auctions are extremely complex and increase the likelihood that auctions will be left without buyers, which in turn will drive down property values.