Bar ownership, an opportunity in years of economic crisis

| 2014 – Number 1
| February 2014 | 3570 Views | with No Comments

The economic crisis sees as obstacle but also as an opportunity. How many times in recent years have we heard repeating it from fine analysts and from “table” experts chatting in bar? Well, maybe – in real estate – a situation confirming this “two-faced” theory is coming to light. The bare ownership. That is, a transfer of real estate that remains however available to sellers until they need to occupy it. A selling solution that, once, it was not taken into consideration and that now, even if it represents only 0,7% of the total supply, has grown by almost 22% over the past three years. This is the result of a study carried out by the Research Department of, a leading Italian website for real estate classified ads. This used to be a “typical” situation for seniors with no heirs or for seniors that wanted to set aside a little nest-egg: they choose to transfer the ownership of the real estate but not the right to use the asset.

Nowadays the number of people interested in this opportunity has grown. And that’s the situation for the combination crisis/opportunity to come into play. If, on the one hand, financial difficulties could have led more and more people (and maybe elderlies with low retirement pensions) to find a way to  enjoy a worry free old age, on the other hand bare ownership represents a wonderful opportunity for those who has some money to invest but they do not need to have the asset at their disposal. A sort of long term bond that will give some profits at the end and that, in the meantime, will be taken care by whom usually considers and treats that house as its own. “No doubt the liquidity crisis is one of the main reasons of this phenomenon – says Carlo Giordano, CEO – and it proves that the demand for bare ownership, meaning a transfer of real estate that remains separated from the use of it, exists also outside the big cities and it is equal to the sale demand”.

In particular, in all five cities taken as a sample, the growth in sales of bare ownership is a double-digit: from 2010 – present, the supply has increased by 20,3% in Rome, by 18,7% in Milan, by 17,4% in Florence and by 15,5% in Genoa. Only in Naples, the percentage is just over 10%, reaching 11, 1%. This probably means that in the South the house is still very important for people and sales in bare ownership still remains a taboo hard to overcome. Usually the properties sold in bare ownership are located in low-cost buildings and in semi-central areas or in suburbs. The value of the sold properties ranges from 142.000 Euro in Naples to 228.000 Euro in Rome. The general decline in market value has obviously had an effect on these sales: the advantage for the buyer is smaller compared to a classic purchase of a property in the past. But the expectations on this kind of sales, could represent for buyers an impulse to wait for better times in real estate. The discount on bare ownership, right now, are quit high: a 24% saving on market price in Milan and 35% saving in Naples. In the middle Rome (24,7%), Genoa (25,6%), Turin (26,6%) and Florence (31,1%).

Compared to 2010, demand (which being considered exclusively (97%) as an investment, it is concentrated in the big cities) has remained stable because of balancing between the increase of supply, therefore the opportunity to purchase, and the reluctance in investing in Italy. Oddly enough, in the French Riviera real estate market bare ownership enjoys excellent health. In this area, where investments have already shown their profits, sales of bare ownership represents 3,5% of the total and, supply being equal, demand has increased by 11% in three years.

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