Milan: real estate market slows down, house sales decline

Fewer apartments are being sold in Milan. In the first half of 2023, the real estate market in the shadow of the Madonnina slowed down compared to the same period in 2022. These data were published by Tecnocasa.

"The first half of 2023 - says Fabiana Megliola, head of research at Gruppo Tecnocasa - shows a significant slowdown in the real estate market, with a corresponding decrease in sales and an increase in prices and rents. The permanent interest rate adjustments made by the European Central Bank have significantly reduced the upward trend that characterized the market after the pandemic. Those in need of mortgages have been particularly affected. Added to this is the general uncertainty causing a more cautious' 'significant increase in prices. The highest growth (+1.9%) was recorded in Naples. The capital ended the half-year with a value of +0.7%. Secondary metropolitan areas ended the first half of 2023 with a price increase of 0.6%. The price trend was particularly striking in the provinces of Palermo and Verona, which have become popular due to the tourist destinations on the sea and lake. Prices in provincial centers rose 0.4%, especially in central Italy. New construction prices, while rising, are also growing at a slower pace compared to the previous six months (+0.6%). Rising construction costs have also slowed this segment of the market.

Real estate transactions are contracting: Milan (-20%)

In the first half of 2023, 350,855 residential properties were sold in Italy, 12.5% less than in the same period' '2022. Metropolitan cities recorded a slightly larger decrease (-14.0%) compared to non-metropolitan cities (-11.7%). Megacities saw a 14.9% decrease in transactions.

How the real estate market will develop in the next few months

The slowdown in the Italian economy, the rise of' 'The rates carried out in September by the European Central Bank, the insufficiently strengthened confidence of businesses and families, and the opinion of Gruppo Tecnocasa agencies, confirming the desire to buy but the growing caution of potential buyers, have led us to revise our forecasts for real estate prices, which will not exceed 2% at the end of 2023. Transaction volumes are expected to be around 680,000. The real estate market is more accustomed than ever to rapid change, which requires quick responses to new needs and lifestyles. One way is through regeneration, which should not only revitalize the area and properties, but also create a sense of belonging, inclusion and growth.