Real estate purchases and sales of 2023
The National Council of Notaries (hereafter CNN), the only source that provides details of residential transactions divided by price ranges, recently published data on 2023 real estate transactions.
These data make it possible to analyze the trend of Italian purchases and sales for the luxury real estate segment (hereafter MRL), which in Italy is defined by the sale price above €1 million. Unfortunately, in fact, in the survey in question the last bracket contains all transactions equal to or above this threshold without the possibility of further segmenting.
The series begins in 2019 because prior to that year, CNN did not detect segmentation of transactions by price classes.
In 2023, luxury real estate transactions accounted for only 0.88 percent of the total, and this percentage is the highest recorded in the five-year period 2019-2023. Overall, the MRL has 4,815 transactions, down from the previous year. The numerical figure and the percentage figure highlight that the size of this market is much more subtle than normally imagined by the public.
The NC also provides the division of the buying and selling that took place into four categories.
Not unexpectedly, the largest number of transactions relate to second homes(ed. The term "second" means "not first" and therefore includes third, fourth homes and beyond).
Purchases from businesses are worth just under 60 percent of the market overall (first and second homes). Of these, more than 90% relate to second homes.
Because the NCC data are aggregated nationally and not broken down geographically, it is not possible to determine precisely where the luxury properties sold are located. Therefore, it is not possible to accurately calculate the size of Milan's MRL. The estimate based on our more than 30 years of experience in the segment is that it may be worth between 30 and 40 percent of the overall Italian market.
Comparison with the U.S. market
Looking at the data that emerged from this analysis and reflection with regard to the luxury segment, a comparison with the U.S. is spontaneous.
In the U.S. real estate market, the luxury segment, by definition, represents the top 10 percent of the total real estate market-that is, transactions that in terms of overall price are between 90 and 100 percent.
We tried to apply this segmentation methodology to the Italian data in the four categories examined. We are aware that the lack of a geographic breakdown of transactions makes the data less meaningful. It seems to us, however, that the picture of MRL that emerges offers a markedly different perspective than the perception we all have of the luxury segment.
In Italy for theyear 2023, the top 10 percent of transactions has the following amounts as a lower limit (i.e., all transactions exceeding the indicated threshold are included in the top 10 percent):
First homes from individuals: € 292,000
Second homes from private individuals: € 232,000
First homes from enterprise: € 479,000
Second homes from enterprise: € 555,000
It clearly emerges that transactions from businesses are not only vastly majority in percentage terms (just under 60 percent as noted earlier), but have much higher values than transactions between individuals.