housing markets in italy after the crisis uberto visconti di massino
DESCRIPTION
Housing Markets in Italy after the crisis Uberto Visconti di Massino ERES 2010, June the 25 th , 2010. Agenda. the Real Cycle and residential values The PAST The PRESENT The FUTURE The FUTURE 2: a great potential. the Real Cycle and residential values. Theory & practice. The PAST. - PowerPoint PPT PresentationTRANSCRIPT
Housing Markets in Italy after the crisis
Uberto Visconti di Massino ERES 2010, June the 25th , 2010
UVM ERES 2010
Agenda
1. the Real Cycle and residential values
2. The PAST
3. The PRESENT
4. The FUTURE
5. The FUTURE 2: a great potential
2
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3
the Real Cycle and residential values
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Theory & practice
4
Increasing Demand growth Under S
upply
Over S
upply
Decreasing Demand growth
2
4 1
3
16 17
Values (Prices - Sq.
Meters – Built
volumes, etc.)
Expansion Stabilisation Downturn Recovery
Trend Conjuncture
Time
Complete market Cycle
Graph 1.The hypothetical pattern of the real estate cycle and its main four phases.
16 17
Quantity (Sq.
Meters – volumes,
etc.)
Time
Demand
Production
Tendency
OVERSUPPLY
Demand / Production GAP
Overall Trend
Conjuncture
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5
The PAST
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Past cycles in Italy
50
200
350
500
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Prezzi reali (deflazionati) Tendenza lineare di lungo periodo
6
I II III VI
Source Scenari Immobiliari - Italy
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What went wrong?
50
200
350
500
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Prezzi reali (deflazionati) Tendenza lineare di lungo periodo
7
0
50
100
150
200
250
300
350
400
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
197619
7719
7819
7919
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
08°
2009
*
2010
*
2011
*
2012
*
2013
*0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
real prices (no inflation) number of sales
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Residential cycle analysis, results
8
Res sales and Prices
a correlation
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
N° sales per annum €/sqm average (S-I) + Working scenario
3 years
5 years
1 year
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(residential)
9
Overview of the past
(repeating itself?)
Synthesis of the last Cyclical downturns and the forecasted one
downtrn years Quarters Years Quarters Yearsreal values Nominal
Ist 1975 / 77 -8.5% Positive 12 3 0 0
IInd 1983 / 86 -19.0% Positive 16 4 0 0
IIIrd 1993 / 98 -29.4% -10% 24 6 15 5
-18.9% 17 4 5 2
IV 2008 / 11 -10.8% -3.4% 20 5 12 3
Nominaltotal price decline
Average past
real values
Table 1 – the residential cycles in the past 40 years, .
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A market going crazy….
10
$
Cpv
t 2005
2004
2002
200120009997
96
94
76
78
79
80
86
87
88
89
90
93
9192
8584
83
82 81
77
75
9598
2003
100
110
120
130
140
150
160
170
180
190
200
210
220
230
240
250
260
270
280
290
300
80 100 120 140 160 180 200
Index of N° of sales transactions
Index ofPrices in constant Lira
Source: data processing by Reddy’s Group spa on data Censis, Agenzia del Territorio - Servizio Statistiche Giudiziarie
The Honeycomb cycle (Residential property in Lombardy)
The Honeycomb cycle (Residential property in Lombardy)
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11
The PRESENT
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..... after 3 years
12
Overview of some current indicators
N° sales
►from 200 to 2007 province 67 to 72% / capitals 33 to 28%)
►The shift towards deurbanization was due to Moving out to buy a better, cheaper home
New stock available outside, + gardens!
►2009: there had been 600k sales: - 15,6% national level (I sem 2009 on I sem 2008)
… of which – 12% on capital cities / -17% in province
►The “back to town” shift province to capitals due to Difficulties in commuting
Lower periphery prices Vs province prices
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..... after 3 years
13
Overview of some current indicators
€ - prices
►from 2000 to 2007 prices increasing, then decreasing: National level: – 6,3% (2009/2008)
End 2008 on I sem 2008: -3,6%
I sem 2009 on II sem 2008: -2,7% (decline reducing?)
►Focus on cities: Milan and Florence better than average
lower prices in cities due to inelasticity of new built (province)
►Peripheries versus city centers peripheries loosing more in value: lower quality homes
Less immigrants demand for old homes (in peripher.)
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14
The FUTURE
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Overlook, a correlation
15
Italian GDP and constructons.Euroconstruct onCresme et Al. - Dec 2008
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Real Estate and the Economy
16
2007Financial crisis begins (USA from housing mortgages)
2008The Global recession begins (hits Financial and Economic / w orld)
2009End crisis/boost to economy (Equity Investors emerge)
2010Stable Economic conditions(employment/spending increase)
2011Grow th of Economies (employment, spending increase)
2009End financial crisis (natural course of cycle)
2010End of Global recession(markets recover, still low “real” economy)
Upside scenario Downside scenario
2011Stable Economic environment (employment and spending increase)
2009Financial Crisis continues (no positive drivers, externalities)
2010Financial Crisis continues(no positive drivers, externalities)economy)
2011End of Global recession (markets recover, still low “real” economy)spending increase)
2012Stable Economic environment (employment/ spending increase)
Base scenario
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The Italian market (residential)
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Overview
► In general, Demand wise we can have three scenarios. The refer to the economic forecasts :
► if UPSIDE, then ALL TARGETS (residential) will recover in 2010
► if BASE scenario: in 2010 we will have only the “NEED TO BUY” “NEED TO RENT” ones active in the market, and in 2011 ALL TARGETS
► if DOWNTURN, we will have NEED TO BUY in 2011 and ALL TARGETS active in 2012.
(NEED TO BUY= have savings and need more space, more rooms (consolidated families whose children are growing) NO BUY: those who can only rent (young couples, no children), professionals singles, senior couples (still using their old home, empty nesters)
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The market cycle in the current setting : forecasts
18
Fonte: nostra elaborazione su fonti varie tra cui Scenari Immobiliari, Banca d’Italia.
DATA - Nov 08 2004 2005 2006 2007 2008° 2009* 2010* 2011* 2012* 2013*
NOMINAL Residential Values Y.o.y. indexY.O.Y. 6,5% 5,2% 5,0% 4,4% 2,7% -1,0% -1,6% -0,6% 1,2% 3,5%
REAL Residential Values indexY.O.Y. 4,2% 3,4% 3,3% 2,5% -0,7% -3,0% -3,5% -2,5% -0,5% 1,5%
Construction Costs indexY.O.Y. 4,2% 4,2% 3,4% 3,7% 2,8% 1,1% 0,9% 1,4% 2,7% 3,0%
C.P.I. Inflation 2,2% 2,0% 2,1% 1,8% 3,4% 2,0% 1,9% 1,9% 1,7% 2,0%
-3,0%
-2,0%
-1,0%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
2004 2005 2006 2007 2008° 2009* 2010* 2011* 2012* 2013*
NOMINAL Residential Values Y.o.y. index Construction Costs index C.P.I. Inflation
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CASE STUDY €/mq/anno €/mq/mese apt 100 mq apt 60 mq rendimento valore
al mese al mese lordo tasse €/mq
1 Abitazioni Popolari comune di Monza (Mz) 5 0,4 40 25 - - 2 Abitazione ACER Emilia, tipologia ERP 15 1,3 130 75 - - 3 caso Parma (E.r.s.) 40 3,3 330 200 3,50% 1.100 4 Milano social housing (FHS) 70 5,8 580 350 3,50% 2.000 5 Milano periferico 110 9,2 920 550 3,50% 3.100 6 Co-Housing semicentro ("Residance") 120 10,0 1.000 600 3,50% 3.400 7 Milano semicentro 160 13,3 1.330 800 3,50% 4.600 8 Milano centro ristrutturato 200 16,7 1.670 1.000 3,50% 5.700
IPOTESI IPOTESI
al netto delle spese
Table 1, Rents : popular (ERP, 1 e 2), sustainable (ERS, in the box, 3 -4), and “free” market
Source: our calculatios on : ACER, Fondazione Cariplo, Co-Housing Venture, Scenari Immobiliari
Whare are we now?
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THE FUTURE 2
What next? “Sustainable” homes
(social housing – Edilizia Privata Sociale) in Italy
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A shift in the residential mindset
21
►From 100 B.C. to 1800 Brick and mortars (the roman “insula” to the condo.)
►In 1900 the first revolution Electricity – hydraulics
►2006 – 2020 the second revolution Energy saving and sustainability
►In 2011 the third revolution The ethic side, management and common services.
Institutional investors
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S.H.- What is it? Some cases
22
Social Housing 360° - arch. LAURA ROCCAFonte: RoccAtelier (www.roccatelier.it)
E.R.S. a Crema, Fondazione Cariplo, Fondo Abitare Sociale - architetti D2U Fonte: Jacopo della Fontana (www.d2u.it)
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Social Main Street – Bicocca, Milano- arch. DANTE BENINIFonte: studio Urbam – C.d.O.
Concorso Figino (Fond Cariplo) arch. CINO ZUCCHI e Avventura UrbanaFonte: www.avventuraurbana.it
S.H.- What is it? Some cases
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Some models to learn from : Social Housing in the Netherlands
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Social Housing in the Netherlands
25
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Social Housing in the Netherlands
26
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Social Housing in the Netherlands
27
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CONCLUSIONS
28
Uberto Visconti di Massino
Milano
Corso Italia, 17
20122 Milano
Tel. 02 00621170
Fax. 02 00621189
Roma
Via XX Settembre, 1
00187 Roma
Tel. 06 42020939
Fax. 06 42020951
www.epf.it
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GRAZIE - THANK YOU !