1 Permanent Committee on Cadastre in the European Union – PCC Gianni Guerrieri Director Real...

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Permanent Committee on Cadastre in the European Union – PCC

Gianni GuerrieriDirector Real Estate Market Observatory and Appraisal Services

Italian Experience of Real Estate Market Observatory

Rome November 20, 2014

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The information can be classified in two groups:

- MacroeconomicsFor controlling general macroeconomic conditions

- MicroeconomicsFor appraisal of real estate assets

INFORMATION ON REAL ESTATE MARKET


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INFORMATION MACROECONOMICS

Lack of macroeconomic indicators for the real estate market

Indispensable information set for controlling general macroeconomic conditions

- EUROSTAT (housing price index )

HOUSING PRICES ALONE ARE INSUFFICIENT INDICATORS

OTHER STATISTICS AND INDICATORS ARE NECESSARY


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INFORMATION MACROECONOMICS number of housing units bought and sold (new and

existing); amounts bought and sold (expressed in square meters); existing housing stock; relationship of the number of houses bought and sold to

existing stock; the number of purchasers and their main characteristics

(age, gender, income and available housing stock); type of financing, distinguishing amounts deriving from self-

financing and those from debt, detailing the loans in terms of the type of collateral provided (purchased housing, other property, other collateral) and qualifying other forms of financing;

a similar set of indicators for the non-residential sector, particularly for the most common uses (shops, offices, industrial warehouses).


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INFORMATION MICROECONOMICS

Appraisal of real estate assets - at the base of a pyramid which allows credit to be provided or allows the values of assets in a real estate fund to be brought up to date

Adequate information is necessary for appraising real estate with any given procedure.

lack of information

lack of transparency

uncertain appraisals

Increased risk (credit, real estate funds etc)


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INFORMATION MICROECONOMICS

Needed information Availability of data regarding real estate transactions in

a given geographical area Availability of transaction prices

Availability of rental costs

Availability of the technical characteristics of the property (area, building type, state of repair etc)

Availability of marginal prices of the different characteristics

Availability of legal information (planning constraints, liens etc)


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ITALIAN EXPERIENCE: REAL ESTATE MARKET OBSERVATORY

Real Estate Observatory of Agenzia delle Entrate

Mission : contribute to the transparency of the real estate

market; provide support for the Agency’s assessment

activities; improve cadastre and real property databases for

statistical - informational purposes


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REAL ESTATE MARKET OBSERVATORY

production of statistics regarding the real estate market starting with the cadastre and real property and financial administration databases in general (started in 2001);

management of the real estate price database

(launched on January 1, 2004) which required a gestation period of approximately three years for its design and testing.


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Residential real estate report:

geographical and sectorial analysis

regarding number of residential units

sold and distribution of housing stock,

price indices, mortgages (annual)

Report on non-residential property: for

the most important segments (shops,

offices, warehouses (annual)

Observatory Database

Handbook

Local reports: twice yearly analyses of 19

cities and their provinces


Quarterly Notes: quarterly update of the number

of property sales, mortgages and real estate

prices (quarterly);

Banca d’Italia, Agenzia

del Territorio,

Tecnoborsa Survey

(quarterly)

Cadastral Statistics: annual report on the

real estate units surveyed by the cadastre

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The key steps in reaching these results are:

division of the cities into areas that are as homogeneous as possible in terms of the housing (or prevalent) market;

conducting the survey of economic data for individual real estate units;

processing of this data; validation and publication.


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Market Price:

•Transactions: Public Register

•Direct Information

Estimated Market Price:

•Agency Estimates

Offer Price:

•Real estate agencies

•Real Estate Publications

Information providers: percentage contribution

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Market Price:

•Transactions

•Direct Information

Estimated Market Price:

•Agency Estimates

Offer Price:

•Real estate agencies

•Real Estate Publications

Number of observations: - 2013 year

Total = 80.951

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In the future….

a) reinforce the availability and accessibility of economic information of real estate market observatory

b) draw up a new Report on number of rents and on price of rents

c) Draw up a new Report on mortgages for purchasers of real property or for those to raise funds for any purpose

d) Draw up a new Report on agricultural farmland bought and sold


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IN CONCLUSION…

• Verify the level of information that the management bodies of administrative real estate data - such as the Cadastre or the Real Estate Registries – are able to generate for the transparency of the real estate market. The European statistical system could ensure the collection and availability of this information.

• Discuss the necessary minimal conditions for the availability of information that can render the principles of appraisal practice operationally concrete and for improved data rents and values of the cadastre.


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