In the last interview I did on behalf of Fimaa Veneto with Luca Dondi CEO of Nomisma, I had left off with a "we hope to hear back soon with more comforting and positive data..."
Well, Luca I heard back from him-but not for positive data!!!
In this article you will find an update of the report released in late March by nomisma regarding the real estate outlook for the next two years.
Given the protracted Lockdown, the well-known statistical agency has decided to publish a new update that exacerbates the scenarios predicted in the previous one. If, as written in my previous article, 2 scenarios were originally predicted, one "soft" and one "hard," in the new analysis the previous "hard" scenario has become the "base" prediction, leaving room for a more severe horizon that I will call... "hardissimo" (ed.)
Let's go and see what the institute provides for our beautiful country.
The data, corroborated by forecasts from the International Monetary Fund and the investment bank Goldman Sachs, in the Hardissimo scenario predicted by Nomisma, GDP for 2020 will fall 8.2 points from the previous year, then halve in 2021(-4.2) and approach zero in 2022(-1.3)
What is the impact on the housing market?
If previously the worst-case scenario predicted a reduction to 500,000 purchases and sales by 2020, today this value appears to be reduced by another 20,000 units ( forecast for this year 479,000 transactions) with a negative peak for 2021 and 2022 of 365.000 transactions. A figure never seen before.
NEVER since 1985 has our country fallen so far below 400,000 transactions/year. Even back in 2013, transactions had stopped at just under 390,000. We are facing a shocking and unparalleled real estate scenario.
The most severe backlash is estimated in investment in the corporate sector. Whereas previously a 50 percent drop was expected from 2019, today that forecast has been reduced to one-third for 2020.
The decline in transactions according to Nomisma will also lead (based on the correlation of previous years) to a gradual decline in prices. As you can see in the table below, over the next two years a decline in values is expected to be as high as - 15%.
In the report that you can download in full at the end of this article, Nomisma also analyzes the impact of the coronavirus crisis on mortgage lending.
While the pre-virus trend showed us 53.4 bn disbursed for financing the purchase of real estate, today the Hardissimo scenario sees a reduction to 37.9 bn by 2020 and 21,2 for 2021. This means 30 billion euros less circulating in the country's real economy.
As I am writing these lines I am looking for a positive aspect to point out, a correlation between the performance of past economic crises and the current one but one that could result in positive hope or room for improvement...but I cannot find it. What has hit our country (the whole world really), with its already fragile economy that was laying the groundwork for a recovery, is an unprecedented storm.
Below is the video interview conducted for Fimaa Veneto
However, I do not want to end this article without a positive message for you who are reading me.
This crisis that has hit us has given us and will give us a sense of belonging that perhaps we did not have before. In the months ahead there will be a great need for solidarity, civil and economic. Already in these two months of quarantine we have seen how businesses have converted in a short time to produce basic necessities to cope with the emergency. Minds and souls have come together to pursue a common purpose not necessarily related to profit.
There are those who have provided their knowledge, products and manpower for free to give an unambiguous answer. We do not give up.
Online movements have sprung up with the intention of enhancing our area, promoting little-known tourist destinations, local businesses and small stories of entrepreneur-heroes.
Although some sectors have been completely destabilized at the grassroots ( tourism, mobility, catering) this particular moment requires us to make a sudden change in operations and perspective.
This year as a people we must look at each other in the face, investing in our territory, our products and our culture. Today more than ever, a common enemy from afar has made us all equal and forced us to become aunited community under one flag.
I hope that this spirit of collaboration, neighborliness and technological innovation will remain when all this has passed. And make us a better country and better people.
Like a small seed making its way through the rubble, we will grow back--stronger and more aware than before!
If you are looking to sell your home at this time, please contact me!
Thank you for reading this article, if you feel it might be a useful message for others, I ask you the courtesy to share it with whomever you like!
