Let’s ease into 2021 with some data relative to the past year, focusing our attention as always on the trends and market niche activity.
2020 ended with an increase in the prices of residential properties in that in northwestern Italy went up as much as +5.2%, surprising many. Actually, this is not surprising at all, considering that the pandemic has put home ownership more than ever at the top of everybody’s list of priorities, for every family. The primary residence as well as the second home – in the country, at the seaside, in the mountains; I wrote about this in some of my articles last year.
What is surprising, however, or at least rather striking, because it is such a new phenomenon, is that perhaps for the first time the increase is not uniform throughout the territory.
What is surprising, however, or at least rather striking, because it is such a new phenomenon, is that perhaps for the first time the increase is not uniform throughout the territory, but indeed there are some areas where prices are going down, compared with other areas and types of property that we see increasing sharply. Covid is what is causing, also in this case, an acceleration of the process of “gentrification” about which we are hearing so much and which creates a clear line of demarcation between desirable zones and quality property, on the one hand, where prices are increasing, and zones of lesser quality, even those once considered middle-class, where the prices are trending downward or, at best, holding steady for the more ergonomic properties with outdoor spaces.
In the past, during periods of growth, prices went up in every zone, regardless of quality and desirability, and while there could be a difference in the percentage, it was always within the range of positive numbers. In other words, it could happen that in the areas around Florence, for example, real estate values on the hills of Fiesole and Settignano might increase by 5% in a year and in the same period in the Novoli district near the airport only by +2%, but the trend was upward in any case. That is no longer true and this is plain for all to see. The diversification concerns both the zones and the types of buildings: small apartments and apartments without outdoor spaces and pleasant or scenic views are penalized.
Areas far from public parks or the countryside are likewise penalized. The increases are around the sea, lakes, hills and mountains. There is a huge demand for houses with a garden or habitable terrace in the city, in any part of town. There is an increase in demand for comfortable apartments in restructured buildings and prestigious palaces in safe locations, pedestrian zones, neighborhoods protected by law enforcement.
In this connection, the probable decrease in tourism and business travel in coming years is leading even a giant like Airbnb to reposition itself quickly on coastal and mountain locations to meet the current needs and desires of the clientele.
The city centers deserve particular attention here, where the demand is concentrated around medium-large apartments (minimum two bedrooms, but even three bedrooms are of interest to people who want to have room for an office and for guests, often children and grandchildren who they think and want to stay forever close by), while interest in waning in the small apartments that in the past were highly prized for short-term rents. In this connection, the probable decrease in tourism and business travel in coming years is leading even a giant like Airbnb to reposition itself quickly on coastal and mountain locations to meet the current needs and desires of the clientele. The recovery of high-level tourism should resume well ahead of mid-level tourism, which will likely be penalized by the economic effects of the crises, and this will place the emphasis exclusively on the higher quality real estate. Personally, I expect a real boom in reservations, as soon as the pandemic ends, for luxury hotel structures, top-line apartments and villas, possibly even starting in the summer of 2021 if the positive effects of the vaccines take hold.
The world of short-term rentals, medium and medium-low level apartments and 3-star hotels will remain out of the running, I’m afraid, at least for the next few years, unless Asian tourism is able to bounce back sooner and occupy these types of accommodation.
The search for larger properties in the city and second homes is increasingly connected to the family and the desire to gather safely in order to deal together with this long pandemic period of which we still can’t see the end. Summer 2020 revealed this clear sign, and I think summer 2021 will confirm it, taking the summer holiday and tourism back by thirty years to the time when most Italians spent their vacation in Italy and it lasted a full month.
The coming years will, I think, be characterized by families getting together for extended periods, at the seaside or in the mountains, and much less by short trips and weekends here and there in Europe, and even the country homes near the city will be lived in year round once again, and it will be easier to restructure them thanks to government incentives.
At a closer look, it is a return to a lifestyle that was still rather widespread in the Eighties and Nineties and characterized the weekends and summer vacations at that time, a return of the joy of family reunions, the simple pleasure that now acts as a salve to the mind and soul struggling to recover, and brings to mind Signorina Felicita:
“…the table already set – you’d ask me to stay and dine. An old-style meal, on floral plates, the cat, the moth and the simple flowered tableware”.
G. G. Gozzano
In these renewed and current searches for property suited to the needs of the extended family, I can clearly recognize the vestiges of a path of finding those well known moments and places, that communicate a sense of withdrawing into himself of a crepuscular taste that is the balm we all seek in times of grave uncertainty.
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