Intentions to buy and renovate homes in Italy and Europe
This article supplements the one that appeared in issue No. 1/2022 of Elevatori Magazine, entitled: “Construction and real estate: the European scenario”.
Nomisma data, November 2021
A vigorous economic recovery…
During 2021, the Italian economy embarked on a path of intense growth and recovery of the production levels lost due to the pandemic emergency. In particular, the second and third quarters were characterised by extremely gratifying GDP growth rates, respectively +2.7% and +2.6% (according to preliminary estimates) in cyclical terms. This acceleration was above the European average, effectively narrowing the gap with Europe’s main competitors when compared to pre-pandemic levels.
… ensured by the success of the vaccination campaign…
The prerequisite for this growth was undoubtedly the success of the vaccination campaign, which made it possible to greatly reduce the number of infections and, consequently, progressively limit the containment measures. This has enabled many economic sectors to return to acceptable levels of activity, including those that were most affected by the restrictions on containing the virus, such as the services sector.
… and by an unprecedented availability of public resources.
This growth is anomalous and very different from that experienced in other historical periods, since it is characterised by an unprecedented amount of economic resources made available by European and national institutions. Initially, the effects of the economic crisis generated by the pandemic spread were mitigated by measures to support the economic fabric, which in fact made it possible to maintain the income capacity of families and prevent the closure of many productive activities. Subsequently, funding linked to the Next Generation EU led to the preparation of an investment programme that is a real driving force for the entire Italian economic system.
The uncertainty and risks of the economic scenario. However, the forecasts on economic developments in the medium term are characterised by a high degree of uncertainty, mainly due to the unknowns on the spread of the pandemic, which can be traced back to the possibility of the emergence of new variants of the virus that vaccines cannot fully contain. The most likely hypothesis is that people will live with the virus for a longer or shorter period of time, and continually adapt to fluctuations in the infection curve.
The other factor causing great uncertainty is the rise in the price of raw materials and transport costs, which could dampen the recovery of production activity and lead to an increase in the costs borne by businesses, with repercussions on the prices of final products and wage trends.
Le intenzioni di acquisto di abitazioni si confermano su livelli straordinariamente elevati. Il clima di fiducia eccezionalmente positivo a cui si è fatto riferimento poc’anzi investe anche il settore immobiliare: l’indicatore sulle intenzioni di acquisto di abitazioni misurato dall’Istat ha registrato una crescita quasi costante a partire dall’inizio del 2020, fino a raggiungere nel 2021 punte vicine ai massimi della serie storica (fig. 3.2). L’ultimo dato riferito alla parte finale dell’anno segna una leggera flessione, addebitabile alla componente più volatile (coloro che rispondono “probabilmente sì” alla domanda sull’intenzione di acquistare un’abitazione nei successivi 12 mesi), mentre la quota di chi dimostra maggiore fermezza (“sicuramente sì”) addirittura aumenta. Ancor più positivi sono gli indici di fiducia riguardanti le intenzioni di ristrutturazione, saliti su valori mai sperimentati in passato, grazie anche alle eccezionali misure di incentivazione varate in concomitanza con la diffusione dell’emergenza pandemica (fig. 3.3).
CRESME data from the 92nd EUROCONSTRUCT Conference
According to the new estimate, total construction output in the Euroconstruct area fell by 4.7% in 2020, a more moderate decline than forecast six months ago.
The final result for the current year as well as the new short-term forecast have also been improved, although slowing down in the medium term.
The synchronic international recovery, the use of infrastructure as a classic fiscal policy, and the introduction of generous incentives for renovating and updating buildings are some of the sectoral factors supporting the positive outlook and its overall improvement, in a more general context of economic recovery and rising confidence indices in all countries.
The level of building production in 2021 is set at €1,740 million, which, after the difficult 2020, already represents a fully recovered loss, thanks to a significant jump of 5.6%. At country level, the situation is very variable: in seven countries the pre-crisis level has already been significantly exceeded, in six others market capacity this year is flat compared to the 2019 level, while in the remaining six the gap is still negative, with one large country still having to reabsorb around a 10% negative gap compared to the pre-crisis level.
The new short-term outlook is defined by brisk growth next year (+3.6%) and an increase of no more than 1.5% in the next two years. Some elements of concern may affect the general positive scenario, these come from the supply side, not only in terms of raw material prices but also in terms of labour shortages and may also derive from the direction of public support.
All non-residential construction will show a relatively better performance in the near future, in the face of a more moderate increase in the level of expenditure on housing: in particular, a growth rate close to 3% per year is estimated for civil engineering, not so far from that forecast for non-residential construction (+2.5% on average 2022-2024), while for the largest European market the slowdown path should be more marked (+1.6%).
At the country level, positive development will be sustained by strong growth (over 4%) in Ireland, Spain, Hungary and the United Kingdom; a flat trend is forecast for Germany and Switzerland, while sector output is expected to contract in Finland and Sweden.