Houses, with the high prices, we are looking for smaller and smaller ones (but there are none on the market)

With the rise in rates affecting mortgages and ever-increasing real estate market prices, they have contributed to the evolution of a new concept of home: buyers always look for smaller spaces (an average of around 118 square metres) with just over three rooms, but it is difficult to meet sellers, since it offers rooms of over 127 m2 and at least four rooms. These are the data that emerge from the first study by Century 21 Italia, the national branch of the American real estate brand, and Wikicasa, a proptech that distributes and analyzes online information to facilitate and make sales more transparent, analyzing the details of cities: Milan, Rome , Turin, Bologna, Florence, Naples, Catania, Palermo.

Supply and demand do not meet

In the first months of 2024, we can see that most sellers have put three-room apartments or even properties with five or more bedrooms on the market. At the beginning of 2023 the market trend was very different: those looking for a home were oriented towards 130 m2, while at the end of the same year the requests concerned houses with average surfaces of 125 m2, to drop further, as we have seen, to 118 m2 overall. beginning of 2024. The reasons? Multiple. «They must be sought in the period of profound change that the sector has gone through in recent months – explains Marco Tilesi, CEO of Century 21 Italia -: we have gone from a period in which the conditions of access to credit were particularly favourable, to a period of sharp rise in mortgage rates. In the period immediately following the pandemic, conditions were such as to push demand towards larger solutions, today we are starting to require increasingly smaller solutions, especially in large cities”.

The reasons and the prices

As anticipated, «the increase in rates is certainly the main cause of this process, but not the only one – adds Mattia Colantuoni, co-founder of Wikicasa – it is necessary to observe the “nature of demand”: those who buy a property are pushed for housing or investment reasons. In the first case, the progressive reduction of the family unit, with the decrease in spending capacity, has led to a more fragmented demand, which does not require large-scale solutions. At the same time, however, purchases for investment purposes, often linked to making the property profitable it pushes the entirely Italian concept of “home as a primary and fundamental space for the family” into the background, leading to a reduction in the demand for square footage”. And the price analysis perfectly summarizes this trend. According to the study, the average price of those who buy is just under 160 thousand euros, while that of properties for sale is close to 230 thousand euros.

The rental market

If there is a clear imbalance in sales (since the beginning of 2024, 238 thousand advertisements registered against almost 30 thousand requests), the rental market is stable: 22 thousand requests registered in the first months of 2024 correspond to 23 thousand offers. But economic difficulties are also evident here: «Difficulties in accessing credit and a new concept of living combine with the boom in short-term rentals – they explain from Wikicasa – and have led the rental market to become saturated in a short time, becoming the a true “scarce resource” of the sector”. From the study it can be seen that the houses placed on the rental market are on average larger than those sought after from potential tenants, 81 m2 of the offer versus 69 of the demand. Landlords mainly place two-room apartments (7 thousand adverts) and three-room apartments (5 thousand adverts) on the market. The price remains the problem: those looking are willing on average to rent for 700 euros, while property owners aim for average rents of just over a thousand euros.

The case of Milan

Milan, undoubtedly, remains one of the most attractive cities in Italy, but from the analysis of Century 21 Italia and Wikicasa it seems that the search for houses to buy has slowed down. At the beginning of 2023, around 1,400 were recorded, while a year later the share remains around 1,000 with a decrease of 30%. On the supply side, many sellers have been attracted by rising prices from year to year properties for sale increased from 4,751 to over 6 thousand. Furthermore, the Lombardy capital is where the greatest price gap can be seen: owners put properties on the market valued at an average of 470 thousand euros, with buyers looking for houses with an average value of 268 thousand euros. And it is always Milan that holds the record for smallest houses requested by buyers: we are around 68 m2.

The real estate market in Rome

The situation in Rome is different, where the market accelerates: requests to purchase a property have gone from over 1,300 at the beginning of 2023 to 1,800 in 2024 and with an average request in terms of square footage, well above Milan, with 89 m2 . The supply and demand prices, also in this case, show an imbalance but less pronounced than in Milan. In fact, those who search do so keeping in mind an average price of 260 thousand euros, while those who sell start from 340 thousand euros. In the capital the real Achilles’ heel is the rental market: faced with a demand for properties for rent, which by the beginning of 2024 stands at 2,300, the adverts “just” reach 1,300 with average prices of 1,400 euros , well above the average request in Italy.