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What Happened to the Real Estate in Rome?

Real estate in Rome has always been a lucrative business for many reasons including its political and economic role. Even though Rome position in the property market is somewhat less attractive than the position of Milan, mainly due to the higher concentration of international businesses and more flexible bureaucratic structure in the northern "capital," it still has the excellent opportunities to invest. The interest from the investors both international and local has remained very high over the last years and it has been driving the yields on all major types of properties down. When you search ViaCasa.it, it is possible to compare the volume of investments in Rome in 2005 with the volume in 2008. It is clear that the restricted supply of the qualitative property and the constant decline in yields has led to the decrease in the volume of the real estate transactions in Rome by more than 5% over the last years.

Office property contributed the most to the total volume of transactions closed in Rome (more than 60%) followed by the investments in retail (20% of total volume) which is currently experience the declining trend. At the same time, the logistic market has remained quite undeveloped over the recent years in Rome and the demand for higher quality projects in logistics is growing. As a result, the logistics sector continues to show an excellent performance. You can observe this trend if you search ViaCasa.it for the number of logistics facilities offered in Rome and its current market value.

The whole real estate market in Rome has performed relatively well increasing the total number of the real estate space to circa. 10.5 mln sqm. Despite the fact that the vacancy rates have to some extent increased, it is still very close to the vacancy rates of 7% in Milan. At the beginning of 2008, the investments in the real estate in Rome (circa. EUR 600 mln) have outperformed the investments in the real estate in Milan (circa. EUR 530 square meter). 67% of the investments in Rome for this period were due to the supply of the "Roma Est" shopping centre valued EUR 400 square meter.

The global financial crisis that started eroding the real estate markets in 2008 has affected all sectors of real estate in Rome, yet, the residential market suffered the most. The lack of financial liquidity and the availability of mortgages have caused the decrease in demand and started driving down the market value of the residential property in Rome. If you search ViaCasa.it and subscribe to daily news update, you will obtain the latest update on the consequence of the crisis for the real estate in Rome. ViaCasa.it source says that the negative equity in the property market will further undermine the property market in 2009. The decrease in the market values of the real estate in Rome will fluctuate on average between 3 and 4 per cent, yet, the total number of transactions has already fallen to its minimum and is expected to remain constant. The residential areas such as Parioli are expected to maintain low house prices.

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