As thoroughly described in the first part of the post, there is an irregular trend in the real estate market: compared to the previous cycle, a dramatic change in the social and economic conditions of the employees has been observed.
They are still willing to purchase properties although they may get into debt, however the new employment contracts have not been acknowledged by the loan market yet, and are unlikely to be.
Then a new scenario emerges in the ordinary real estate market, which is closer to the Anglo-Saxon model.
We expect 3 major changes in the real estate market in the future:
– adjustment of the number of transactions:
the purchases and sales will reach a number in line with our GDP and will settle for some time since mortgage loans will not be granted anymore;
– fewer private homeowners and lower quality of the properties:
increasingly fewer people will afford a privately-owned house, therefore the average quality of the houses will tend to decrease. High-quality craftsmanship and labour are peculiarities of our Country, and we should protect them;
– onset of different housing solutions, where expenses and spaces are shared (co-housing, social housing, co-working, zero impact buildings);
Therefore the approach to the real estate market should be changed to enhance non-performing loans. For each change, a new approach is suggested as follows:
– we assess the properties according to their net yield:
the property will not be regarded anymore as a driver and satellite activity for economy, and will become an income asset; in this sense, all those assets that can strongly adjust the price should be considered, due precisely to the fact that they are not commensurate with their performance (for example the villas in Versilia or many apartments in the Costa Smeralda )
– we regard the quality of the properties as an added value:
… even if not directly proportional to the price. It will be more difficult to find properties with valuable finishings and high-quality furniture, and this may be a decisive variable for the sale or leasing;
– we start considering the new housing and customer supply solutions:
Although currently co-housing and similar solutions may seem risky, they still represent the future of real estate initiatives; sharing economy and crowdfunding will soon be applied to the real estate market and, if suitable adjusted, to the loan context.
Our staff would like to wish you all Merry Christmas!