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MARKET SUMMARY

1.1 Definition and presentation

Real Estate Agencies are intermediaries which facilitate the reconcile between supply and demand. In order to enable market equilibrium within the housing industry, real estate agents oversee negotiations between sellers and buyers or owners and tenants.  

Real estate agencies act for two types of clients:

- Residential customers: the majority of real estate agencies are dedicated to individuals looking to buy or rent houses, land or garages in urban and rural areas.

- Commercial customers: a minority (less than 10%) of real estate agents are focused on the search and match of commercial real estate - offices, industrial land, factories and warehouses or shops.

There two major forces influencing the trend of the market:

- Purchase and rent of housing: the real estate industry in Italy has shown weak signs of recovery, the price evolution of housing is indeed among the worst in Europe.

- Fierce competition: alternative distribution channels – e.g. Internet and franchisees. A progressive number of Italians are using the internet as an alternative searching tool, leveraging on the easier and faster comparison between housing structures.

Consequently, real estate agencies face considerable threats within a market that is additionally not performing well.

1.2 Italy’s position within a strong European context

According to Agenzia delle Entrate - Italian Tax Agency - the number of transactions within the housing market in **** generated a turnover of approximately **.* billion euros. The contribution to the national economy deriving from the housing market in Italy grew by *.*% between the years ****-**** – the highest percentage increased experienced at ...

DEMAND ANALYSIS

2.1 Demand overview

According Centro Studi di Abitare Co. demand for new homes is developing, the first quarters of **** registered a *,*% sales growth, whereas demand for existing homes is not experiencing positive signs.
The number of housing transactions is representative of the cyclicity of the market. Based on the **** reference index - number of ...

2.2 Demand determining factors

Quantitative determining factors
Interest rate

Source: ****
Mortgage interest rate has been experiencing a decrease since ****, which brought its value to roughly **% less in ****. The decrease of the interest rate is impacting the house loan requests. Data observed from the intermediaries participating in the Bank Lending Survey, shows that house mortgages in ...

MARKET STRUCTURE

3.1 Organization and dynamics of the market

The number of independent real estate intermediaries reached in **** approximately **,*** - figure that increases to roughly **,*** when considering franchising activities.
Following the growth of real estate transactions, the number of individual operators active on the Italian territory increased since ****, although in the pre-crisis period the number was close to ** thousand. [***] Franchisees ...

3.2 Independent versus franchising

In Italy the real estate agency market remains dominated by independent professionals, grasping roughly **% of the total market.
The remaining percentage is in the hands of franchisee, whose incidence has been progressively increasing in the last few years.
Geographically franchising activities have the largest weight over total agents in Campania, with ...

3.3 Digital Revolution: threat or ally

In Italy **% of the population utilizes the internet, that translates into approximately ** million active users. The progressively increasing online pool impacts undoubtedly the evolution of traditional industries. [***]
Real estate agencies can either fear the web or embrace it. The first outcome results from lacking to efficiently leverage the tool and consequently ...

3.4 Rent versus Sale

In **** the situation was extremely different: the number of traditional houses for rent was more than double the number of short terms rentals and close to **% higher than the purchased real estate. Just two years later, short term rentals experienced a boom that brought its amount to *** thousand (***).

Source: ****
Those considerable ...

ANALYSIS OF THE OFFER

4.1 Real estate agencies’ beneficiary offerings

Real estate agents’ earning is based on:
- Fixed amount, an amount one is entitled to independently of the sales performance.
- Commission, a percentage dependent on the number of closed deals.
Italian legislation does not regulate real estate commission amount, the latter is generally at the discretion of the ...

4.2 Weak price evolution

Following the accommodation index price IPAB (***) one can observe a slower evolution for housing prices.
Istat data confirms that since **** Italy has not shown a strong price growth, except for **** alone, which marked a positive price variation, IPAB has exclusively been negative.

Source: ****
Italy and Sweden are the only two countries ...

4.3 Artificial Intelligence

The real estate industry is increasingly being affected by the technological revolution. Artificial intelligence is forecasted to impact greatly the business model of many organizations.[***]. According to Osservatori Digital Innovation **% of organizations adopted AI in their systems in Italy in **** and roughly **% are planning on doing so.

Source: ****
The progress that ...

RULES AND REGULATIONS

5.1 A progressively more regulated profession

Real estate agents are qualified to exercise the profession exclusively after enrollment in the Chambers of Commerce for the role of brokers, business agents.
Following art. * of law ** **/**/**** there are two alternative requirements necessary to become a real estate agent:
Second degree diploma, training course and examination. Second-degree diploma, practice for ...

POSITIONING OF THE ACTORS

6.1 Segmentation

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chargé d'études économiques, Xerfi

Hugo Schott

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Associate Consultant

Mathieu Luinaud

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PhD Industrial transformations

Robin Charbonnier

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Analyst

Pierre Doussau

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President Ross Alumni Club France

Arnaud Walter

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Analyste de marché chez Businesscoot

Amaury de Balincourt

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Consultant

Pierrick Cudonnec

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Project Finance Analyst, Consulting

Maelle Vitry

Etudiante en Double-Diplôme Ingénieur-Manager Centrale

Héloise Fruchard

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EDHEC

Imane Essadiq

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Auditeur

Vincent Defrenet

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Eva-Garance Tison

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Market Research Analyst

Michela Grimaldi

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Azelie Prigent

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Market Research Analyst @Businesscoot

Cantiane Gueguen

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Consultant

Jules Decour

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Alexia Vacheron

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Emil Ohlsson

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Anna Oeser

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Gabriel Salvitti

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