ITALY IN BRIEF
• In 2012, the deceleration in the economic growth of some important European countries contracted even the international growth, especially if compared to 2011. This consequently reduced the GDP of some areas like UK and USA
• The global environment negatively affected the economic activity in Italy. In 2012, GDP was expected to fall by 2.3% in real terms as a result especially of a reduction in domestic demand, but lately OECD recognized for Italy a negative variation of approx. 1.0% only and released forecasts of a limited increase in 2013
• Besides its historical performances, Italy shows a quite similar performance to the Euro area, if compared with other relevant economic areas
ITALY IN BRIEF
Comparison among different GDPs (2007-2013)
-6,00%
-4,00%
-2,00%
0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
12,00%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Italy
EU
U.K.
U.S.
Spain
Germany
Source OECD
REAL ESTATE MARKET IN ITALY
The persisiting international crisis heavily hit the Italian economy, but the real estate business performed much better than others.
We will focused on the total number of transaction (TNT) in:
• Residential Market
• Non-residential Market (office, retail, hotel and productive plant)
Our research will present the market situation from the year 2008 to the year 2013
All the data are taken from the report of the National Observatory of the Real Estate Market (http://www.agenziaentrate.gov.it/wps/content/Nsilib/Nsi/Documentazione/omi/)
RESEARCH CRITERIA
We divided the italian Real Estate Market in five macro-areas:
• North-East area (Emilia Romagna, Friuli Venezia Giulia, Veneto);
• North-West area (Liguria, Lombardia, Piemonte, Valle d’Aosta);
• Central area (Lazio, Marche, Toscana, Umbria);
• Islands (Sardegna, Sicilia);
• South area (Abruzzo, Basilicata, Calabria, Puglia, Molise, Campania);
We will present all the data aggregated by macro-area.
RESIDENTIAL MARKET
RESIDENTIAL MARKET I AND II QUARTER 2013
AREA TNT NORTH-EAST 35.646 NORTH-WEST 67.502 CENTRAL 42.449 ISLANDS 18.836 SOUTH 38.688
0 20.000 40.000 60.000 80.000
NORTH-EAST
NORTH-OVEST
CENTRAL
ISLANDS
SOUTH
RESIDENTIAL MARKET TREND 2008-2012
0
50000
100000
150000
200000
250000
2008 2009 2010 2011 2012
South
Islands
Central
North-West
North-East
IMPACT OF THE INTERNATIONAL CRISIS
As shown in the graph above the Italian Real Estate Market follows a decreasing trend especially in the North-East area.
The following table shows the percentage reduction in the total number of residential building transaction from 2008 to 2012, the volume of transaction has been more than halved (- 54,05 %) by the crisis:
AREA PERCENTAGE CHANGE
NORTH-EAST - 64,69 %
NORTH-WEST - 54,65 %
CENTRAL - 48,86 %
ISLANDS - 59,21 %
SOUTH - 46,38 %
NON-RESIDENTIAL MARKET
NON-RESIDENTIAL MARKET I AND II QUARTER 2013
AREA TNT NORTH-EAST 4.441 NORTH-WEST 6.993 CENTRAL 4.684 ISLANDS 1.479 SOUTH 3.850
0 2000 4000 6000 8000
NORTH-EAST
NORTH-WEAST
CENTRAL
ISLANDS
SOUTH
NON-RESIDENTIAL MARKET TREND 2008-2012
0
5000
10000
15000
20000
25000
30000
2008 2009 2010 2011 2012
CENTRAL
NORTH-EAST
NORTH-WEST
ISLANDS
SOUTH
IMPACT OF THE INTERNATIONAL CRISIS
As shown in the graph above the Italian Real Estate Market follows a decreasing trend especially in the North-West and Central area.
The following table shows the percentage reduction in the total number of non residential building transaction from 2008 to 2012, the volume of transaction has been more than halved (- 66,54 %) by the crisis:
AREA PERCENTAGE CHANGE
NORTH-EAST - 66,65 %
NORTH-WEST - 75,11 %
CENTRAL - 72,39 %
ISLANDS - 62,63 %
SOUTH - 45,49 %
APPRAISAL OF THE TOTAL ITALIAN ASSET VALUE 2006-2011
The life cycle of the real estate market is still in a downturning phase as it can be shown by the historical series of transactions, but taking into account the fact that the number of transaction are halved, there has not been a corresponding reduction in values as the follow graph shows:
0
1000
2000
3000
4000
5000
6000
7000
2006 2007 2008 2009 2010 2011
RESIDENTIAL
OFFICE
RETAIL
HOTEL
INDUSTRIAL
Euro/bn
REAL ESTATE FUNDS IN THE MARKET
• The Real Estate Investment Funds plays a role that is getting bigger and bigger
• Their presence is getting more important, especially in some major segments, like offices in which their assets rapresents the 6.6% of the total value of the existing private assets
• Their contribution in other submarkets is smaller: industrial (about 3%), followed by hotel (about 1%). Very limited investments by RE Funds can be found in the residential sector at the moment.
WEIGHT OF REAL ESTATE INVESTMENT FUNDS
0 5
10 15 20 25 30 35 40 45
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Euro/bn
CONCLUSIONS
CONCLUSIONS
• The crisis affected the overall economy over the last years but the Italian real estate market showed a substantial stability in values, thus revealing a more limited risk.
• The diminish of the transactions does not mean the market is completely frozen.
• Even the Italian real estate market, in comparison with other European markets, lack of dynamism in consideration of its structure, there has been over the last 10 years a positive trend that involves a more active role played by institutional investors, through Real Estate investment Founds, able to stabilize the market, make it more transparent and more effective