Photo by Gruppo Tecnocasa - copyright
Linda Fornara Bertona
Real estate, holds luxury sector
Galloping inflation and relentless interest rate increases by central banks also bring uncertainty to the real estate market, which has always been considered safer than other investments.
According to research conducted by Standard and Poor's Corporation (S&P), 2023 will see declining real estate values over the next three years across Europe, but without reaching a general collapse of the sector in the short term. "Rising mortgage interest rates will affect the cost of houses but the decline in values will happen gradually taking time without immediate collapses, residential real estate prices in Europe are rather inelastic with respect to declines and the downward adjustment of prices could take years because there are so many factors involved in shaping house prices," explains a note from the company.
"Last year 2022 will close with significant trading volumes. New 2023 according to our forecasts will record a decline in transactions and prices still slightly growing. The increase in interest rates, which is already feeling on those who need important loans and economic and working uncertainties will lead to a downsizing of the availability of spending. It could therefore happen that, for a group of potential buyers, there may not be the requirements to access credit or to access it with lower amounts. The luxury segment will remain unchanged thanks to niche demand and low supply", says Fabiana Megliola, Head of the Tecnocasa Group Research Office. Sales between 680.000 and 700.000 and prices between +1% and +3% The main house segment in 2023 should still record interesting volumes thanks to the desire to buy a house. Investors will return to tourist rentals on the areas of large cities affected by redevelopment interventions and on attractive tourist resorts, able to guarantee an interesting profitability. The search for new properties seems to be confirmed, even if we will have to deal with increases in construction costs and a slowdown in construction sites.