Italians are starting to plan buying a house again.

Italians are once again starting to plan home purchases. According to the latest update from the Residential Real Estate Market Research conducted by the Fimaa-Confommercio office, demand has increased by 13.8% over the past year, driven by the dynamics of the rental market and a decrease in mortgage rates. Among the factors supporting the market are high rental payments and strong demand for rental housing, which is prompting many small and medium investors to focus on buying properties to rent out (58.4%). In contrast, larger investors are looking for income-generating properties in prestigious urban or tourist areas (6%). 22.9% of Fimaa participants consider high inflation to be a determining factor, while 6% of respondents believe that a potential decrease in bank rates will lead to an increase in transactions.

Factors slowing down exchanges include high reconstruction costs (44.7%), concerns about the economic situation, mortgage rates, and employment (36.1%). 17.6% of agents participating in Fimaa believe that the market suffers from regulatory and tax restrictions, such as energy classification and taxation of profits from real estate that benefited from the 110% super bonus.

Overall, housing prices are rising by 1.8%, mainly due to new constructions (which, according to Istat data, increased by 8% in October 2023). "These figures," comments Fimaa Italia President Santino Taverna, "indicate that people looking for housing are increasingly paying attention to energy-efficient properties to save on operating costs. A study by Fimaa-Confcommercio based on Istat data shows that since 2010, the cost of new buildings has increased by 22.6% in real terms, adjusted for inflation. However, despite strong demand, the share of new homes sold has halved due to a lack of supply (17.7% in 2023 compared to 34.8% in 2010)."

The rental housing market, on the contrary, is experiencing a 5% increase in rental payments, with temporary contracts seeing the highest growth (6.7%), while agreed rental payments have risen by 2.4%. According to data from FIMAA Italia based on information from the Tax Service, the average rent is 532 euros per month. Property owners prefer long-term contracts (49%) or agreed contracts (27.4%), with significantly lower shares for those opting for temporary contracts (19.1%) or student rentals (4.4%).

“Fimaa agents also - comments Andrea Oliva, coordinator of Fimaa research offices - believe that in the coming months, the rental market will be characterized by a strong mismatch between supply and demand.

Regarding the real estate market, almost half of the associates (43.9%) fear that availability will decrease further. 48.8% believe it will remain stable, while only 7.3% anticipate an increase. As for rental payments, 58% think there will be an additional increase, 37.1% believe they will remain stable, and less than 4.9% expect a relaxation,” concludes Andrea Oliva.

Regarding expectations for the first half of 2024, about half of Fimaa agents (45.2%) believe that the number of transactions will decrease. However, this percentage significantly drops compared to previous data (61.5%), while expectations for stability (38.7%) and growth (16%) are increasing. The majority of association members (65.1%) also believe that prices will remain roughly at the same level. 19.5% predict a decline, while 15.3% anticipate an increase.

In addition, about half of Fimaa agents (45.1%) believe that the demand for housing will remain stable, while 27% hope for an improvement. However, nearly the same proportion expects a decline. As for the supply of real estate, an absolute majority of agents (57.7%) believe that the level will remain stable, while the rest are divided between those who hope for growth and those who fear a decrease.