Changes in the Italian real estate market: crisis due to rising mortgage rates.

The Italian real estate market is going through a deep crisis phase due to rising mortgage interest rates. According to a recent study conducted by the National Notary Council, in the first half of 2023, primary home sales decreased significantly by 8.7% year-over-year. This decrease resulted in a decrease in the number of properties sold from 303,375 to 277,052. If this trend continues throughout the year, a decline of 10.5% is expected.

The provincial cities, especially administrative centers, are the most exposed to this economic situation. Analyzing the geographical picture, the most significant decrease is in North-West Italy, where there is a decrease of about 12%. The islands, meanwhile, saw a slight increase of 2%.

This negative dynamic is also reflected in other metropolitan areas of the country. Rome saw a decrease in sales of about 10% and Florence a 9% decrease in sales. Turin and Naples have also not escaped the crisis, with both cities reporting a 7% drop in transaction volume.

The main factor responsible for this difficult situation is the rise in mortgage interest rates, which makes buying real estate a financially burdensome option for many buyers. This significantly affects the real estate market by reducing transaction volumes, especially in large and expensive urban areas. The situation will require careful monitoring and measures may be needed to stabilize the market and stimulate economic recovery in the Italian real estate sector.