How do metropolitan cities evolve after the 2008/2012 crisis and the Covid-19 pandemic? An analysis from real estate market values

Abstract

Italian cities have been touched by two major events, the 2008 and 2012 crises and the Covid-19 pandemic in 2020 and 2021. The research aimed to verify whether, and in what way, Italian cities have embarked on a path of transformation, outlining their possible trajectories of change in the intervening decade. The cities considered were the metropolitan cities to which the legislature has assigned the role of territorial reference for areas of a regional nature. The research examined real estate market values for their ability to represent a city’s degree of attractiveness in synthetic form. The other variables used made it possible to detect trends in the determinants of the real estate market: economic growth, demographic development and changes in the territorial capital endowment. Concerning the research objectives, cluster analysis appeared to be the most suitable tool to represent changes by aggregating cities according to common patterns. The survey considered the reactions of the different cities in the two five-year periods related to each exogenous shock and, overall, in the decade under review for a long-term reading of the trends. The conclusions reached by the survey show how, between 2012 and 2017, there was a concentration of wealth and population in the major centers and in particular in the city of Milan, characterized by rising property values against a generalized decline in the Italian market. In the second five-year period from 2017 to 2022, the pattern is reproduced with similar intensity, despite a vast debate on the crisis of large cities and their sustainability in the face of the pandemic. An overall ten-year view from 2012 to 2022 of metropolitan cities shows trends with a sufficiently solid and stable character. In the case of Milan, the expression of a clear-cut process of concentration on which the pandemic has had no effect, is counterbalanced by a second cluster of peripheral metropolitan cities that are suffering from processes that penalize their development prospects, while the third cluster of cities is distinguished by a profile that combines opportunities for growth and critical aspects in demographic and economic terms. Le città italiane sono state toccate da due importanti eventi, la crisi del 2008 e del 2012 e la pandemia Covid- 19 nel corso del 2020 e 2021. La ricerca ha l’obiettivo di verificare se, e in quale modo, le città italiane hanno intrapreso un percorso di trasformazione, delineando le loro possibili traiettorie di cambiamento nel decennio intercorso. Le città considerate sono state le città metropolitane cui il legislatore ha attribuito il ruolo di riferimento territoriale per ambiti di carattere regionale. La ricerca ha esaminato i valori del mercato immobiliare per la loro capacità di rappresentare in forma sintetica il grado di attrattività di una città. Le altre variabili impiegate hanno permesso di rilevare l’andamento dei determinanti del mercato immobiliare: crescita economica, sviluppo demografico e variazione nella dotazione di capitale territoriale. Rispetto agli obiettivi della ricerca, la cluster analysis è apparsa lo strumento maggiormente idoneo a rappresentare i cambiamenti aggregando le città secondo pattern comuni. L’indagine ha considerato le reazioni delle diverse città nei due quinquenni legati a ciascun shock esogeno e, complessivamente, nel decennio in esame per una lettura di lungo periodo delle tendenze in atto. Le conclusioni cui perviene l’indagine evidenziano come tra il 2012 e il 2017, vi sia un percorso di concentrazione della ricchezza e della popolazione nei centri maggiori e in particolare nella città di Milano, contraddistinta da valori immobiliari in crescita a fronte di un declino generalizzato del mercato italiano. Nel secondo quinquennio dal 2017 al 2022, lo schema si riproduce con analoga intensità, a dispetto di un vasto dibattito sulla crisi delle grandi città e sulla loro sostenibilità alla prova della pande- mia. Una visione complessiva decennale dal 2012 al 2022 delle città metropolitane evidenzia tendenze do- tate di un carattere sufficientemente solido e stabile. Al caso di Milano, espressione di un processo di concentrazione chiaro e netto su cui la pandemia non ha avuto effetti, fa riscontro un secondo cluster di città metropolitane periferiche che scontano processi che ne penalizzano le prospettive di sviluppo, mentre un terzo cluster di città si distingue per un profilo che unisce opportunità di crescita e aspetti critici sotto il profilo demografico ed economico.

Profitability and financial performance of Italian real estate companies: quantitative profiles

“…(2022), which shows a trend of increasing demand for residential properties away from cities in favour of urban suburbs and areas close to green spaces. Such situations can also be observed in Italy (Micelli and Righetto, 2022).…”

“…This research implements the growing reflection of scholars on the effects of the pandemic crisis on the real estate market (Taşan-Kok et al ., 2021; Damianov and Escobari, 2021; Horno-Bueno et al ., 2022), highlighting the consequences of the spread of distance working on the real estate market (Gupta et al ., 2022; Chmielewska et al ., 2022; Micelli and Righetto, 2022), the effects of panic (Karthiyaini et al ., 2020) and the more modest impact of public interventions (Pilinkiene et al ., 2021).…”

“…It was more difficult to compare with other studies related to Italy, although valuable (Avallone and Quagli, 2015;Mattarocci and Scimone, 2021;Gabrielli et al, 2022) because the methodology used was different. This article also facilitated further comparisons between the two recent major economic crises, the financial crisis of 2008 and the pandemic of 2010 (Micelli and Righetto, 2022;Rai et al, 2022;Taltavull, 2022).…”

“…Italy has been plagued by the pandemic, and therefore its experience is significant for assessing the consequences of COVID-19 on real estate supply and demand. The study mentioned above by Micelli and Righetto (2022) compared the responsiveness of demand after the financial crisis of 2008 and the pandemic crisis of 2022 in major metropolitan cities. The authors distinguished different clusters in which they sometimes recorded a significant increase in property values and other times a decrease in favour of more sustainable housing areas.…”

“…Italy has been plagued by the pandemic, and therefore its experience is significant for assessing the consequences of COVID-19 on real estate supply and demand. The study mentioned above by Micelli and Righetto (2022) compared the responsiveness of demand after…”