Luxury Residences Report - I half 2019 - Press release
Milan, real estate in turmoil. Quality supply fails to meet growing demand for prestige homes.
Tirelli & Partners today released theExclusive Residences Observatory with data for the first half of 2019. The report, now in its 16th year, analyzes the highest segment of the real estate market for the city of Milan.
Milan, a city in turmoil
Milan is experiencing a phase of increasing its appeal on a European and global level. It is attracting businesses, beating tourist attendance records, hosting international events, investing in the development of infrastructure and urban and suburban connections, maintaining its undisputed role as the world capital of fashion and design, and increasing its resident population. At the urban planning level, it has demonstrated its ability to implement policies for the development and regeneration of the urban fabric that have only begun to change the face and livability of the city for the better. There is still great potential linked to the new projects being designed and implemented (M4, the reconversions of the former railway yards) that ensure concrete prospects for further growth in investment and related enhancements.
The real estate market for luxury residences
In this general panorama of great lights and rosy prospects for at least the next five years, Milan's residential market and in particular the market for exclusive residences are experiencing great ferment, held back only by the chronic lack of supply of adequate quality.
All key market indicators improve:
Theaverage absorption index rises to 20.5 percent,with dynamics everywhere increasing although with different trends among the survey zones, namely Quadrilateral (16.9 percent), Centro Storico (22.1 percent), Brera-Garibaldi (37.4 percent), Magenta (26.3 percent), Venice-Duse (15.1 percent), Residual Zone(23.5 percent).
The average discounts obtained through negotiation on the asking price are further reduced, falling below the 7 percent threshold.
Positive dynamics for average selling time, now standing at under 9 months (it was 32.6 in the second half of 2015). The most appreciated houses sell very quickly, sometimes even in off-market logic, but the average still suffers greatly from houses that find a buyer only several years after they are first put up for sale.
Milan, real estate prices rise
Asking prices confirm the upward trend: growth is 1.8 percent in average value to +2.5 percent in the segment of the most exclusive and expensive homes. The combination of the increase in asking prices and the decrease in discounting generated a 3.4 percent increase in average actual sales prices compared to the 2018 average. Average discounts have more than halved since the darkest time in the market, also recorded during 2014.
Consequently, average sales prices have returned to the 2011 level, while asking prices reach almost98% after a low (-13%) in 2014.
The most popular areas for foreign investors are Quadrilatero, Brera and Magenta. Foreign demand is looking for representative apartments with an area of 300 square meters or more positioned on high floors in representative buildings.
The top properties: prices and areas
The most significant purchase and sale, with a total value of 9.3 million euros, was in the Brera area, for a residence with unique features, with large terraces and extraordinary panoramic views.
Themost expensive property, for which 20 million euros are being asked, is located in the Quadrilateral area. Also in this area, the highest price per square meter was demanded: 27,931 euros.