italy insight 2016jan-14 jan-16 jan-14 jan-16 the currency play £ $ cheaper 22% cheaper 12% 834,000...
TRANSCRIPT
PRICE PERFORMANCE BUYER NATIONALITIES CURRENCY IMPACT
RESIDENTIAL RESEARCH
ITALY INSIGHT 2016 ASSESSING MARKET CONDITIONS ACROSS ITALY’S PRIME SECOND-HOME DESTINATIONS
737,000
12% cheaper
834,0002014 2014
THE CURRENCY PLAY
£
£ ££
$$ $
THE CURRENCY PLAY
1.09m
22% cheaper
1.38m2014 2014
$ $
£ £CHEAPER22%
CHEAPER12%
THE CURRENCY PLAY
THE CURRENCY PLAY
834,000JAN-14
737,000JAN-14
1.38mJAN-14
1.09mJAN-14
$
£
$
£
£ $
CHEAPER22%
CHEAPER22%
CHEAPER12%
CHEAPER12%
834,000
834,000 737,000
JAN-14
737,000JAN-16
1.38mJAN-14
1.09mJAN-16
1.68m 1.09m
JAN-14 JAN-16 JAN-14 JAN-16
THE CURRENCY PLAY
£ $
CHEAPER22%
CHEAPER12%
834,000 737,000 1.68m 1.09m
JAN-16 JAN-14 JAN-16JAN-14
THE CURRENCY PLAY
£ $
CHEAPER21%
CHEAPER12%
834,000 737,000 1.68m 1.09m
JAN-16 JAN-14 JAN-16JAN-14
Purchasing a €1m home: Potential savings for a British and US buyer Jan 16 vs. Jan 14
Knight Frank Research
Sales and confidence recover Sales vs. CPI Index
Knight Frank Research, Istat *Estimate
NO. O
F SA
LES
(000
’S)
CONS
UMER
CON
FIDE
NCE,
INDE
XED,
100
= 2
013
450
475
500
525
550
575
80
90
100
110
120
130
2013 2014 2015*
ITALY RESIDENTIAL SALES (LHS)CONSUMER CONFIDENCE (RHS)
Knight Frank Research, Istat
ITALY RESIDENTIALPRICE CHANGE (RHS)
GDP GROWTH (LHS)
-3.5
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
2012 2013 2014 2015-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0RECOVERY
GDP
GROW
TH (%
)
RESI
DENT
IAL
PRIC
E CH
ANGE
(%)
ITALY RESIDENTIALPRICE CHANGE (RHS)
GDP GROWTH (LHS)
-3.5
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
2012 2013 2014 2015-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0RECOVERY
GDP
GROW
TH (%
)
RESI
DENT
IAL
PRIC
E CH
ANGE
(%)
Prices and economy pick up Annual % change
Knight Frank Research
2.52015
2.12014
57%The increase in enquiries from buyerslooking to purchase in Italy(2015 vs. 2014)
AVERAGE VIEWINGSPER BUYER
MORE VIEWINGS PER BUYER
Enquiries strengthen
PricesAccording to the Italian Statistics Office, 2015 marked a turning point for residential prices with price growth re-entering positive territory. Prime prices, having softened for several years, are following a similar trend.
Across Knight Frank’s nine prime second-home markets, price performance has converged with annual growth ranging from 2.1% (Venice) to -3% (Sardinia) in 2015.
Although double digit annual price falls are firmly in the past we do not expect luxury prices to increase rapidly. Accurate, sensible pricing by vendors remains critical, particularly given the volume of properties available.
Sales
Market confidence is strengthening, residential sales increased by 7% in 2015 and Italy’s consumer confidence index is up 39% since its low in 2012.
With properties now competitively priced and the choice of properties at its best for several years those buyers with access to cheap finance and those foreign buyers, able to take advantage of the favourable exchange rate, are deciding to act.
In 2016 we expect sales activity to strengthen in five of our prime markets (Tuscany, Florence, Umbria, Liguria and Sardinia) and to stay broadly stable in the remaining four.
CurrencyIn the last two years, the euro has slipped from 0.83 to 0.73 against the pound and from 1.38 to 1.09 against the dollar providing British and US buyers with a strong buying opportunity in Italy.
Taking account of currency movements only this means a British buyer purchasing a €1m property will have seen a 12% reduction in price (or £98,000 in real terms) whilst a US buyer would have seen a saving of 21% (or $288,000).
With QE stimulus still in place across the Eurozone and the dollar likely to strengthen in 2016 on the back of the Federal Reserve’s rate rise we expect foreign buyers to continue to benefit during 2016.
Change in prime prices (2015 yoy)Sales volumes in 2016Top buyer nationalities (Nationality #1)Nationality #2Nationality #3Most common property type purchased
CHANGE IN PRIME PRICES (2015 YOY)
SALES VOLUMES IN 2016
TOP BUYER NATIONALITIES
MOST COMMON PROPERTY TYPE PURCHASED
ABIDJAN, CÔTE D’IVOIRE 13
ABIDJAN, CÔTE D’IVOIRE
445km 89cm
KM
1.5%
€
UP
MILAN
1.5%
1.5% 1.5%
1
2
3
4
MILAN
1.5%
Change in prime prices
Sales volumes in 2016
Top buyer nationalities
Property type purchased
0.2%Italian Lakes
Change in prime prices
Sales volumes in 2016
Top buyer nationalities
Property type purchased
0.2%Italian Lakes
Change in prime prices
Sales volumes in 2016
Top buyer nationalities
Property type purchased
0.2%Italian Lakes
2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
0.2%
Italian Lakes
2.1%
Venice
-1.0%
Tuscany
2.0%
Florence
-2.0%
Umbria
-3.0%
Sardinia
1.5%
Liguria
-1.9%
Milan
Change in prime prices
Sales volumes in 2016
Top buyer nationalities
Property type purchased
0.2%Italian Lakes
Change in prime prices
Sales volumes in 2016
Top buyer nationalities
Property type purchased
0.2%Italian Lakes
2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
Apartment
KEYMost common property type:
House Waterfront Vineyard Rustic/Ruin
GermanyBelgium RussiaNetherlands ItalyChina Egypt France SwedenSwitzerland UKCanada US
0.3%
Rome2015: Change in prime prices yoy
Sales volumes in 2016
Top buyer nationalities
Property type purchased
Change in prime prices
Sales volumes in 2016
Top buyer nationalities
Property type purchased
0.2%Italian Lakes
DemandIn 2015 enquiries from buyers looking for an Italian property jumped 57% year-on-year. Tuscany continues to generate the most interest but Liguria and the Italian Lakes (from Como to Maggiore) are increasingly on buyers’ radar.
Italy attracts interest on a global scale. In 2015, some 171 nationalities searched for Italian properties on Knight Frank’s website with British, Italian, US and German buyers remaining the most active in the prime segment.
Buyers look to be taking advantage of current stock levels. The average number of property viewings undertaken per buyer rose from 2.1 in 2014 to 2.5 in 2015.
Italy’s residential market has turned a corner with viewings, prices and sales all increasing in 2015. Confidence is returning to the market but accurate pricing and realistic wish lists are a must for vendors and buyers.
Moving on up
ITALY INSIGHT 2016 RESEARCH
2 Please refer to the important notice at the end of this report 3
Important Notice © Knight Frank LLP 2016 – This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.
For the latest news, views and analysison the world of prime property, visit
KnightFrankblog.com/global-briefing
GLOBAL BRIEFING
RESIDENTIAL SALES
Rupert FawcettHead of the Italian Department+44 20 7861 [email protected]
RESIDENTIAL RESEARCH
Liam Bailey Global Head of Research +44 20 7861 5133 [email protected]
Kate Everett-Allen International Research +44 20 7167 2497 [email protected]
PRESS OFFICE
Astrid Etchells International PR +44 20 7861 1182 [email protected]
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Knight Frank Research Reports are available at KnightFrank.com/Research
The research data provided in this report was originally published within our Italy: Inside View report
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