Abstract

In 1997/98, real estate prices in Italy began to rise rapidly. However, far from being just an Italian phenomenon, similar rises in price concerned almost all developed countries. The drastic decrease in real interest rates and the considerable liquidity available have been identified as the main causes behind this trend. Despite this increment in prices, other concomitant developments have drastically changed the real estate markets in general, and the real estate services industry in particular. While the output of a building firm consists of manufactured goods, a real estate firm, related to a global industry where finance banking and insurance are increasingly integrated, produces intangible output in the shape of services. In the 90s, the real estate experienced a spectacular growth, confirmed by the 172% rise in the sector employment rates. Furthermore, the data related to the years following the 2001 census indicate the persistence of the 9's trend over the new millennium. The 90s banking and urban planning reforms, the new information technologies, the changes in the economy and in the financial, industrial, logistic and commercial distribution sectors, have set the conditions for the Italian real estate industry's sharp growth; however, still undersized if compared to that of countries that started earlier on this path to development. The percentage of first-time buyers has increased rapidly while the institutional investors' commitment has begun to fall. Industrial and service firms, on the other hand, externalised their assets management even through spin off, while real estate specialised investors, thanks to new financial instruments and the opening of markets, entered the scene. This has allowed industrial and service (even public service) firms to specialise in the core business. In perspective, such is the behindhand demand of quality building building constructions and urban services is so big at the moment that, notwithstanding progresses registered on the supply side, a considerable potential for growth can be still foreseen in the real estate industry.