Interest rates are falling, but real estate prices remain stable.

The increase in interest rates and, consequently, mortgage loans, has reduced demand in the real estate market. As a result, real estate sales in Italy in the current year in the fourth quarter decreased by8% compared to the same period in2022.

It is expected that the highest number of sales will occur inMilan during autumn (10,920), which is twice as much as inRome (4,813) and Turin (4,041). Then come Bari (3,396), Bologna (2,386), and Genoa (2,199).

Nevertheless, from 2011 to 2022, the fourth quarter has always been the period with the highest number of real estate transactions, marking the best time to buy a home. These are the results of the Reopla report "Buying and Selling Real Estate in Italy: Forecasts for the End of 2023," compiled based on AgentPricing, an online service that provides an objective and professional property valuation.

“After the pandemic, the real estate market experienced significant growth, with 558,000 sales in 2020 and 784,000 in 2022, which became the year of the highest growth in the market over the decade from 2011 to 2022. In 2023, the market decline will continue in line with historical trends: data from AgentPricing confirms Istat's assessment that a gradual slowdown is expected, exacerbated by inflation and rising mortgage interest rates, although this is weakening,” said Patrick Albertengo, co-founder and CEO of Reopla.

Therefore, we anticipate that real estate sales across the country will decrease by 8%, especially in large cities. Compared to megacities, provinces suffer more during downturns and are the last to benefit from market normalization: this is clearly evident, for example, in Bologna and Bari, where the most significant drop in sales is observed in the autumn season, at 14% and 13% respectively.

According to Nomisma's forecasts, the number of real estate transactions in 2023 is expected to decrease by a total of 14.6% compared to 2022. This means that the number of transactions will drop from 784,000 in 2022 to an estimated 670,000 by the end of the year. Despite the decrease in transactions, prices remain stable. In fact, a decline in prices is only anticipated in 2024, but not for all types of properties. Specifically, no price drop is expected for premium real estate. On the contrary, prices may even increase, considering the inflationary pressures in the market.