The impact of Coronavirus on the real estate industry of Italy

COVID-19 has highly influenced the economy and business all over the world. Italy was one of the primary European nations to encounter a country-wide lockdown and social isolation limitations. From March 2020, both the Italian government and nearby specialists have given a few declarations and additional guidelines providing for regulations to people’s course, the suspension of all retail exercises, aside from food shops and explicit shops exchanging essential requirements merchandise.

In Italy, the 2020 real estate market closed with over €8.6 billion transactions, with a 30% decline compared to 2019. After one month of lockdown, investors stopped the decision-making process and prepared to get discounts or withdraw proposals with a rise in the pandemic. The real estate market saw a decline in selling/buying in the first trimester due to uncertain situations that urged people to postpone purchases. House prices decreased by 4% due to lack of interest. COVID-19 caused the renegotiation of various primary contracts because of the surprising change in the buyer’s financial condition.  Real estate activity slowed down in the first quarter (Q1). Until two months of lockdown, the investment volumes were the same as that of the previous year due to finalized deals before COVID-19. First-quarter market data reflected no impact of Coronavirus with an investment volume in the range of €1.7 billion, same as that of 2018 and 2019. In Milan, the occupier market stood at 1 00,000 sq m, while that of Rome slowed down at 25,000 sq m. 

Q2 saw no transactions. In Q3, €2 billion was invested in the Italian market. Regardless of a record decrease (20%) compared t0 2019, the investment volume was above that of 2018 figures. In the first nine months of 2020, 5% of the total volume was invested in the housing market, while the office market attracted 50%. In Q2 and Q3, there were a limited number of market deals in 2020. 

 The pandemic’s overall effect expanded each quarter with the loophole somewhere in the range of 2020 and 2019, with 20% in Q1 to 41% in Q4. In Q4, only €2.8 billion have been executed against something between €3.2 billion and €4.9 billion somewhere in the range of 2017 and 2019.  Regarding the asset classes, the following trends were observed. 

Logistics have been versatile with volumes same as that of 2019  

With 70% expansion in works, alternatives have been winners 

workplaces (which performed very well in the initial three quarters) have been affected in Q4 with just €1.22 billion and a decline of 25% on a yearly premise  

22% reduction ((proceeding with a decreasing pattern set up in 2019 and in 2018)) in retail and 74% reduction in hospitality (yet in accordance with 2017 and 2018 numbers 

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