State of the real estate market in Milan
The real estate sector of Italy and, in particular, Milan, considered one of the most economically developed and beautiful cities in the country, is showing clear signs of recovery after the crisis. In this, the capital of Lombardy is similar to large Spanish cities, where after the end of the construction boom, prices and the number of sales transactions fell sharply. Thus, in Milan in 2012, home sales decreased by as much as 25.8%, which was a record figure for the entire period of the financial and economic crisis.
However, it was real estate investment in Milan that gave impetus to the revival of this sector throughout Italy. According to the latest data, the number of sales transactions increased by 18.9%, accounting for 528,865 properties, and the city accounts for a fifth of the total national market. At the same time, we should not forget that in terms of average prices (almost 3,300 euros per square meter), Milan ranks second in Italy, ahead of Rimi and second only to Venice.
In Milan, you need to work for five years to buy a 60 square meter apartment in the central part of the city, while in London or New York this period is 15 and 12 years, respectively.
The fact that investment in real estate in Milan seems promising is also evidenced by the growth in the number of mortgage loans issued, which increased by 27.8% and reached almost thirty billion euros.
Finally, there was, albeit insignificant, growth in the rental market, where 1,690,520 new contracts were concluded – 1.3% more than a year earlier. The average area of rented premises is 92 sq.m. with an average annual price of 60.7 euros per sq.m., which also indicates the recovery of this segment of the real estate market in Milan.
Property prices in Milan
The fact that Milan ranks second in the Apennines in terms of the high cost of housing does not at all mean that it is impossible to find quite affordable apartments here – even if we are talking about new buildings. In addition to location, their prices differ markedly from each other depending on the floor and the availability of all the necessary infrastructure.
If we are talking about budget housing, then it is worth paying attention to at least two peripheral areas suitable for investing in real estate in Milan. First of all, we are talking about a residential complex near the Romolo metro station, the majority of whose residents are middle class and young families. As a rule, they choose apartments with one or two bedrooms with a total area of 60 to 100 meters at an average price of about three thousand per square meter.
The Cozzi area, located in zone 9, in the north of the capital of Lombardy, is very popular. The headquarters of such large institutions as Pirelli, Deutsche Bank and Siemens are located here, but it is not industrial. Milan’s second most popular theatre, Arcimboldi, and the contemporary art shopping center Bicocca Village are nearby.
In addition, here is the Bicocco University with campuses of the faculties of Medicine, Psychology, Economics, Sociology and Law, which annually welcome many foreign students. Another advantage of the Cozzi area is the opportunity to rent out housing to both students and employees of the above-mentioned enterprises, which is considered a profitable investment in real estate in Milan.
As you approach the city center, prices in both new buildings and secondary real estate begin to rise noticeably. For example, at another university – Luigi Bocconi, which is located just a kilometer from the historical center of Milan, the cost of a square meter of residential real estate will fluctuate around 5-6.5 thousand euros.
You can live in fashionable multi-storey buildings in the center area (Duomo, Brera, Spiga) for varying amounts, but in any case they will exceed ten thousand euros per sq.m. Such investments in Milan real estate are also justified, since more and more foreign millionaires would like to live in such a prestigious place.
Why is it profitable to invest in real estate in Milan?
In addition to the recovery of the local real estate market, there are many compelling reasons and reasons for investing in real estate in Milan now.
The dynamically developing capital of Lombardy is attractive to the following categories of the population:
- entrepreneurs, since starting your own business takes only six days – faster than in Germany or the UK. Milan is one of the top five cities for shopping and the top three (after Hannover and Frankfurt for exhibitions);
- foreign investors. A third of all foreign companies in Italy are based in Milan, 123 of which have annual revenues of over one billion euros;
- scientists, researchers, engineers. For example, 26% of Italian biotechnology enterprises are concentrated in Milan, and 22% of patents are registered here;
- students. Milan has two prestigious universities – Polytechnic and Luigi Bocconi, which educate 20% of all foreign students in Italy;
- tourism, developed throughout Lombardy, is another reason to invest in real estate in Milan.
In terms of the prospects for further development of the vast majority of sectors, including real estate, the consulting company PwC, which has been compiling ratings since 2003, placed Milan in eighth place in Europe with a positive forecast in the near future.