Immobiliare is declining: getting a mortgage is getting more difficult.

The Italian real estate market continues to shrink, according to the Revenue Agency. A decrease in transaction volume was recorded in the third quarter of 2023. The rate of decline in purchases and sales was 10.4% compared to the same period in 2022, resulting in 18,000 fewer properties sold overall in the first nine months of 2023.

The decline can be traced across the country. The reason for the decline in transactions continues to be the high level of mortgage interest rates.

When it comes to the third quarter of 2023, the downward trend continues here. In residential real estate sector a decrease in the volume of deals was registered. A total of 157,000 homes were sold in Italy: 18,000 fewer units compared to the same period in 2022. The level of decrease amounted to 10.4%.

After analyzing the data, the Revenue Agency noted that the decline affected all of Italy, without exception.

In the third quarter, 95% of all transactions were completed by individuals, resulting in 150,000 transactions. Of these, 62% are primary residences, compared to 65% in the same period in 2022. Just 41% of transactions were completed with a mortgage loan, up from 50% last year. 8% of transactions were new buildings, the share of which declined in the quarter.

There has been a significant decline in the volume of real estate transactions due to the decreasing consumer power of Italian families, as well as the difficulty in accessing mortgage credit due to the rising cost of money.

The more cautious lending policies and lower demand are reflected in the volume of mortgages issued, which has fallen by 29% this year, resulting in a 13% drop in the volume of transactions.

As a result of the difficulty in buying a home, interest in renting is increasing, according to Nomisma. Over the past year, 7.3% of demand has shifted to rentals, strengthening an already saturated market.