Auction sales reduce the market value of the property.
A study by Reviva has found that property sales at auction reduce the market value of properties. On average, the starting price of residential properties at auction is €700 per square meter, while the average national market price is €1,970 per square meter. Auctions also have a negative impact on creditors and insolvent debtors. The latter lose their house at auction but remain indebted to the bank for the remaining amount not covered by the sale of the property.
In Italy, auction statistics also show differences between cities.
For example, in Bologna the ratio of properties at auction to properties on the market is 1 to 52.1, in Milan it is 1 to 50.7. There are also cities such as Reggio Calabria, where for every property at auction there are 4.7 properties on the market.
The number of real estate auctions in Italy has decreased by 20% compared to 2022, amounting to 152 thousand in 2023 compared to 191 thousand in the previous year.
The decline in auctions, however, has a significant geographic difference: real estate auctions declined much more in the north of the country (50,000) compared to the south (37,000). This trend has continued since 2019 and is due to slower procedures in the southern and island courts, delaying the execution and bankruptcy process. Thus, the central problem is the inefficiency of the courts and its economic consequences.
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