The year 2020 is drawing to a close, bringing with it a complete rocketing prices. As a result of the pandemic crisis, which has changed our habits considerably, this year is closing with profound changes. Especially in our sector. On this Christmas day, we would like to give an overview of the situation in Europe for the real estate market. We can broadly say that prices have changed completely. Above all, the difference between the most expensive houses and the cheapest ones throughout Europe has altered. But without wasting time on chitchat, we can start today’s mini-guide. Simple, intuitive but also full of analytical data. So, if you’re ready, let’s get started!
Before we begin, we need to define what the basic tool for analysing income distribution is. And therefore, which are the areas where a property costs more and those where it costs less. Let’s talk about the Gini Index. A mathematical measure that has a value from 0 to 100. Zero indicates perfect homogeneity of prices. While 100 means perfect heterogeneity. How can this index be useful? Simple. Based on the value taken, it is possible to understand where there is some kind of price homogeneity or differentiation.
From the statistical surveys, through the coefficient mentioned above, it was possible to note that, during the 2020s, the major cities, such as capital cities, remained unchanged. Which means that in the big metropolises, there is no real price disparity between the most luxurious and the least luxurious houses.
Let’s now take a look at what the actual price drop has been and where it has been concentrated. To do this, we have decided to create a ranking of the main European cities, looking at the most emblematic in terms of changes: Italy and Spain
Madrid: =
Rome: =
Lisbon : -1.5%
Milan: -2.3%
Bilbao: -1.5%
Malaga: -1.2%.
Porto: -0.7%
Barcelona: -0.6%.
It can be seen, therefore, that the variations were in any case minimal. This means that, in general, prices between the most luxurious and the most affordable houses are not so different.
While there is no certainty about 2021, we can say that we still expect to see a price upheaval. Both in real estate and in other sectors. The general uncertainty due to the pandemic emergency suggests further price changes. We have seen together how many countries have tried to lift the market either by raising prices or lowering them. In short, there is no single winning strategy. But you have to wait and see how the market develops.
Our wish is not to see prices distorted, but to have the peace of mind to be able to invest in the best way possible. Without freezing contracts or postponing payments.
So, while we wait for further news, we wish you a happy Christmas Eve. We look forward to seeing you in the next newsletter!
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