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Casavo•23 August, Lara Bonalume
Buying a house? It’s worth it (more than what you think!)
There are several reasons that make buying a property definitely more convenient than renting nowadays – in many cases the saving goes up to 37%. Although these numbers would seem exaggerated, by carefully analyzing the real estate market (and beyond) the reasons behind this fact become understandable.
Prices are blocked in the large cities
As we previously told, the prices of properties have been stagnant for several years, with a slight recovery only reported in some large centers. With the exemption of Milan, that in the last period is witnessing a growth in prices, the market in the other cities is still affected by the effects of the crisis that occurred 9 years ago and prices remained blocked.
The rentals are increasing
In the big cities, especially in Milan, we are witnessing really significant phenomena of rental increase, caused by a growth in demand compared to the offer which remains almost unchanged. Offer that in case of cities affected by strong tourist flows, tents to diminish, thanks to the growing interest for the profitability of short term rentals. The person that uses his property as an income chooses ever more frequently to rely on Airbnb or similar services in order to increase his earnings.
The cost of mortgages is at an all-time low
If almost 50% of who need to buy a house does that by means of a mortgage, the favorable situation of the credit market can help the real estate market recovery. In fact, the mortgage rates are at an all-time low, thanks to the drop-down of Euribor and Eurirs – the rates used as a base the variable and fixed mortgages. On average in Italy, for a EUR 12000 mortgage, the fixed nominal rate equals 1.07% or the 0.7% for the indexed. Furthermore, in the first trimester of this year, according to Banca D’Italia, the disbursements have increased by 1.2% on a yearly basis, to confirm that borrowing granting has become easier.
As mentioned above, these reasons make buying a property more convenient compared to renting. The convenience varies from city to city depending both on the rentals average fees and on the properties prices. In the Capital city, if we were to take into account a 20 years mortgage, that covers 10% of the value of a two-room apartment valued 133000 Euros, the monthly mortgage rate stands at EUR 417, compared to the EUR 655 of the rental fee, with a 36% saving. In Milan, the saving stands at 31%, with a rate of EUR 434 and a fee at EUR 635.
The processing of data relating to the saving mortgage vs.rental is based on taking into account a property located in a peripheral area with a 20 years mortgage at 70%. The relating data have been processed by Nomisma and the average mortgage fees recorded by MutuiOnline.
We are thrilled to announce that we have now raised an additional €200 million of capital, bringing the total capital raised to date to €385 million, including debt and equity.
Last week we announced the closing of a new funding round called “Series B”, that follows the Series A one just after 7 months.