A Data Analysis for the Real Estate Market in Milan, Italy

I monitored real estate advertisements in Q4 2020 and Q1 2021, collecting data for 40k+ properties for sale in Milan, finally being able to answer three basic questions regarding the local real estate market:

• Question #1: How do prices change across the city?
• Question #2: How did price change in these two quarters of observation?
• Question #3: What’s the distribution of real estate for sale in terms of city zone, number of rooms and overall property conditions?

During the course of this article, I will go through each of these questions, providing charts and data-driven insights.

Note:

All the numbers, charts and insights presented in this article are related to real estate advertisements, therefore they are not a direct indication of sales activity.

Question #1: How do prices change across the city?

I calculated the average price per square meter and represented the values on top of the city map. They are represented in Figure 1.

Figure 1. Geo-representation of local average prices per square meter (EUR/m2).

Figure 2 shows how the price distribution varies across city zones. Moving from downtown outwards the price variance decreases, while at the same time the number of properties for sale increases (the y-axes have different scales).

Figure 2. Price distribution by zone.

Question #2: How did prices change in these two quarters of observation?

Figure 3 shows that the total number of properties for sale averages 15,500 with a small +/-2% oscillation:

• The downtrend started at mid. December 2020 reasonably due to a combination of the Christmas period and the increased COVID-19 restrictions.
• Later on, starting from the last week of February 2021 the uptrend restarted, and the value at the end of Q1 2021 results very similar to the beginning of Q4 2020.

The second chart of Figure 3 shows the progress over time of the total value for sale, which averages approx. EUR 8 billion.

The third chart of Figure 3 shows the average price/mq which constantly grew from 4,770 EUR/mq at the beginning of Q4 2020 up to 4,900 EUR/mq at the end of Q1 2021: this corresponds to a growth of approx. 5% on annual basis.

Figure 3. The number of properties and total value for sale, along with average price/mq.

Question #3: What’s the distribution of real estate for sale in terms of zone, size and overall conditions?

Figure 4 shows the distribution of properties for sale across city zones and their breakdown by the number of rooms: on the aggregated level, the 3rd ring is the most represented zone, followed by the Northern suburbs.

Figure 4: Absolute distribution by number of rooms.

Figure 5 shows the aggregated breakdown by the number of rooms:

• Two-room apartments are the most common typology.
• Only 2 out of 10 apartments have more than 3 rooms.

Figure 5. Aggregated breakdown by number of rooms.

Figure 6 shows the relative distribution by number of rooms across city zones:

• In the 1st and 2nd rings, larger apartments are more represented than in the outer zones.
• Among suburban zones, the western one has the highest percentage of larger apartments.

Figure 6. Relative distribution by number of rooms.

Figure 7 and 8 respectively show the absolute and relative distribution by property condition across city zones:

• The percentage of properties in excellent status progressively decreases moving from downtown outwards.
• The Northern suburbs are the area with the highest percentage of new constructions (17%), while the other zones are very similar among them.

Figure 7. Absolute distribution by property condition.

Figure 8. Relative distribution by property condition.

Figure 9 shows the aggregated breakdown by property condition in the whole city.

Figure 9. Aggregated breakdown by property condition.