The economic expectations of families are improving. In 2016, in fact, 60% believe that an improvement is imminent and 20-22% think of increasing expenses for children, expanding those for health and for the purchase of durable goods, postponed in past years.
This is the photograph taken by the usual 2016 Survey on Savings and the Financial Choices of Italians conducted by Intesa Sanpaolo and the Luigi Einaudi Research and Documentation Center which was presented today in Turin and which this year focused on investment choices in condition of low or zero interest rates.
If there is recovery, albeit slow, savings are still aimed above all at coping with uncertainty, followed by that made for children and for the home. On the other hand, there is still too little saving for old age. Not only. With the reduction of concerns related to the economic crisis, the share of respondents who are interested in economic issues has decreased (46,5%), overtaking those who are not interested (53,5%). However, when household heads invest, they report the "security" of not losing capital as an absolute priority (up to 58,3% in 2016 from 52% in 2015 and just 23,8% in 2011). Only then come yield, liquidity, as well as long-term capital appreciation.
LESS BOT PEOPLE, MORE SAVINGS MANAGED
In this scenario asset management comes forward, subtracting space from direct investments, on which it is increasingly difficult to make decisions and on which, in the case of Italian government bonds, a traditional investment in defense of savings, the maneuvers of the ECB have affected. With the aim of countering deflation, the ECB bought bonds with market operations: the bonds saw the price increase and the yields fall to around 1 percent or less. Thus, the assets allocated to managed savings instruments increased: in 2015, total assets under management increased from 1,59 billion euros to 1,83 billion (Assogestioni). However, the share of assets held in current accounts remains high, indicating that there is still a good preference for liquidity over less liquid assets. However, the persistence of interest rates at zero it could be a prelude to the sacrifice of liquidity in the search for alternative investments, such as real estate.
ITALIANS DIVIDED BETWEEN HOUSES AND CASH DEPOSIT
An extra survey conducted as part of the research and aimed at 567 small investors tried to understand investment behavior in the persistence of the climate of deflation and zero or minimal interest, with particular regard to the propensity to switch from financial to real investments , like houses. The sample provided clear indications. Faced with the case of interest at zero (or almost) for several years, the interviewees responded with polarized behavioral intentions, as they essentially concentrated on two choices: the choice of liquidity (which would concern 32 per cent of investors) and the choice of real estate investment (29 percent would consider buying a house for themselves and 20 percent the purchase of a house to rent).
The former would be motivated by the intention not to lose or gain money with riskier investments and by the expectation that the zero rates will end sooner or later, and that would be the right time to start investing again. The latter, on the other hand, would show their preference for a potential real estate purchase, moved however not only by economic variables, but also by unresolved needs or simply by the ambition, always alive in Italians, for a better house than the one they own. What differentiates the two groups of investors, at opposite poles of possible choices (total liquidity and total illiquidity), are mainly the aspect of income and the possession of savings set aside in excess of a full year of net income. The latter are factors that increase the propensity for real investment.
BYE BYE DERIVATIVES
Only a small part of the sample of small investors, 8 per cent, would react to zero rates by increasing their risky exposure, ie by buying shares, foreign exchange and derivatives. This is an attitude consistent with economic theory: in fact, changing the combinations of risk and return possible on the market and, in particular, the lowering of returns across the entire risk spectrum does not change the willingness to lose part of the money invested , since this variable does not depend on the market, but on the income, assets and psychology of the individual investor. Finally, 12 percent would buy gold and precious metals and 4 percent would buy works of art. The search for alternative returns in these asset classes is minimal and driven by different economic and behavioral contexts. Those who turn to gold show a fund, even if not well expressed, of fear and general distrust in the financial markets ("after zero interest, who knows what will happen?"). Those who turn to art (4 percent) generally have complex and well-diversified assets and take the opportunity of zero returns to buy a work of art essentially because the opportunity cost has temporarily decreased.
MY HOME FOR LITTLE GIRL WHETHER YOU ARE…
Small investors also turn to houses because this is the investment property market that they know best directly, and in which they are probably most interested. As many as 46 percent of those interviewed declare that they know the housing market and regularly inquire about its prices. Behind the real estate market are the bond market (which is followed by 33 percent of the sample), then the Stock Exchange (24 percent) and the gold market (19 percent).
Those who would like to approach the purchase of a property then have a clear profile:
. He has liquid or liquidable investments aside equal to more than a year of his income (48 percent).
. He also realized that the market for everyday goods is deflationary, helping to crush the long-term returns on savings invested in financial forms.
. He is convinced that he is investing in a "reference asset", which retains its value over time (25 per cent), followed by the possibility of "taking advantage of the moment of low prices" (17 per cent) and by the fact that the income of the The property, ie the rent collected or saved, is higher than what the bank or a bond can offer (13 per cent). Furthermore, 19 percent think that house prices will rise in the next few years and 14 percent aim, in doing so, to take advantage of good and unique conditions on mortgages.
. They often have ambitions for a better home (43 percent) or a real need for a larger home (29 percent).
Potential buyers of a new home are between 11 and 19 percent of the sample over the next three years. What holds buyers back? For the moment, the convalescent weakness of the secondary market is acting as a brake, ie the fear either of not being able to liquidate one's current home or of obtaining an insufficient price for it to make the leap in quality. In other words, as the real estate market becomes more liquid and sales times for used homes shorten, the potential demand for new homes will transform into effective demand.
THE TAX UNDER THE TREE
59 percent of the sample, if they could ask the tax authorities for something, would favor a rebalancing of taxes between those on the house and those levied on other forms of assets. However, this propensity, the majority, is not necessarily linked to imminent real estate transactions and responds more to a question of fiscal fairness than the taxation of assets. It should be remembered that the Government has already met these requests by lightening the taxation with regard to the first home.
However, the requests of the remaining 41 per cent of the sample should be observed and underlined. These requests, in fact, would be a prelude to real estate transactions and give an idea of the "frozen" potential demand in the housing sector. 14 percent of the sample would like to find a reduction in the registration tax for houses to be rented out under the tree; 13 percent would like a tax credit to sell and buy back a first or second home during the same year; 9 per cent would like to deduct the mortgage on the second home to be rented out; 6 percent would like to deduct the mortgage on a second home to keep for themselves. The propensity to buy homes could be decidedly higher than that declared (between 11 and 19 per cent), if the tax burden on real estate investments were eased.
RESEARCH
The Survey deals with a monographic theme every year: in 2016, attention was focused on investment choices in conditions of low or zero interest rates (“Low rates and volatility, back to bricks and mortar”). It was based on interviews carried out by Doxa between January and February 2016 with 1.011 households holding bank and/or postal current accounts; within the family, the main decision-maker regarding savings and investment was interviewed, ie the person most informed and interested in the topics covered in the questionnaire (in 77 per cent of cases, the head of the family). An additional sampling of 312 interviews was also carried out on a target of small investors between the ages of 29 and 55, then elaborated by putting together the interviewees of the oversampling with those of the "households" sample belonging to this same target (255), for a total of 567 heads of households, who were surveyed on their reaction to the "zero interest" context and on the attractiveness of real estate investment.
