Italian residential market will be again shored up by the north’s appeal

Th e e conomic downturn , along with a worsening labour market , will undermine buyer’s confidence in the following months. A correction in house prices of up to 5% on a national level is very likely this year. A h alt in transactions during the lockdown followed by a slow recovery on the back of muted demand will weigh on the market’s prospects this year. Yet, buyer’s confidence should gradually improve along with a strong rebound in economic activity in H2 2020 , helped by aggressive monetary and government measures. Also, foreign demand, which has been key in driving prices higher, will come back to the market. Tax regimes for high net worth individuals (since 2017) and retirees moving to south of Italy (since 2019) will continue attracting foreign and Italian nonresidents to invest in Italian residential market. In particular, the north of Italy, specifically the province and the city of Milan, will see a relatively quick comeback of buyers. Milan’s appeal as economic, financial and fashion center will continue attracting real estate investors. Specifically, residential market in Milan will be shored up by: i/ a strong economy, ii/ a relatively more resilient labour market, iii/ ongoing population growth, iv/ favorable credit conditions, v/ non-dom status and vi/ insufficient supply of fully renovated, high-quality apartments/houses.