Market Trends of Italy Luxury Residential Real Estate Industry
This section covers the major market trends shaping the Italy Luxury Residential Real Estate Market according to our research experts:
Increase in Residential Properties across the Italy due to Less Mortgage Rates
The cost of getting a loan to buy a home also has an effect on the market for luxury residential real estate. Most Italians take out a mortgage to purchase a home, and mortgage debt accounts for about 70% of all household debts. As a result of the Federal Reserve's aggressive interest rate cuts and quantitative easing, Treasury yields went down, which lowered mortgage rates. Experts in the field say that the current housing boom is a result of a mix of low interest rates, high demand, and limited supply. It is a situation that many are feeling acutely about, with no single policy to blame and no easy fix.
Between the first quarter of 2018 and the second quarter of 2021, Italy's mortgage rates went down a lot. When compared to other European countries, Italy's interest rates are low and house prices are going down, which has brought back interest in the real estate market. Even though they haven't reached the levels they were at before the crisis, the number of transactions in the luxury residential real estate market and the number of mortgages given to buy homes show that the sector in Italy is on the upswing.
Milan has been able to attract more people and investments, both inside and outside of Italy, in recent years than in the past. This is because Milan is both the business and financial capital of Italy and a center for innovation. This ability to grow and try new things was also reflected in the luxury residential real estate market, which was the most active in the country. Since 2012, the number of luxury home sales and prices have gone up steadily. Some parts of the city are now among the most expensive places in the country to buy a home.
Demand For Housing Market To Remain Elevated
COVID-19 had a big effect on the luxury residential real estate market, but the housing market is still strong because more people are buying their own homes.Most of the demand in this sector comes from condominiums and apartments. Apartments are likely to dominate the sector when compared to condominiums. Because 64,000 apartment units will be completed in Q2 2021, which is more than condominiums.
The homeownership rate in Italy has been high since 2008, at about 70 percent. There were more than 140,000 housing units available to meet consumer demand in the fourth quarter of 2021, and owners and renters occupied more than 89% of them. Additionally, the majority of the country's older and middle-aged citizens contribute to the sector's sales. For instance, people aged 45 to 65 will account for more than 70% of homeownership rates in the country in the first four quarters of 2021. In addition, the growth rate of home ownership in 2021 remained resilient, despite a slight decline from the previous year due to changes in consumer behavior during the pandemic. In 2019, approximately 72.4 percent of Italians lived in an owner-occupied household.
