Italy real estate forecast to 2023: Predicted sharp rental growth and stable sale prices.

According to the latest Economic Survey of the housing market in Italy for the first quarter of 2023, conducted by Bancitalia, Tecnoborsa and the Agenzia Internazionale (Internal Revenue Service), inflation trends will continue to have a negative impact on housing demand. Real estate agents in Italy are not optimistic about the sector's prospects, as sale prices are almost stable but rents are rising sharply. Nearly one in three also report difficulties in obtaining mortgages from buyers. This is the latest information on the outlook for real estate in Italy for 2023.

Italian housing market survey

The housing market survey was conducted among a sample of 1,458 real estate agents in Italy between April 3 and May 4, 2023 and covers the first quarter of 2023. According to the real estate agents surveyed, inflation will continue to negatively impact the outlook for the housing market with a reduction in demand. With mortgages becoming increasingly difficult to obtain, property prices are seen as stable while rents are rising sharply.

House prices in Italy are stable

The majority of respondents still rate house prices in Italy as stable for properties offered for sale, while the average discount on sale prices compared to initial inquiries is decreasing again. The time to sell has also decreased, reaching a new low since the beginning of the survey.

In Italy, it is increasingly difficult to find a mortgage loan

30% of agents report that buyers are finding it increasingly difficult to find a mortgage to buy a home in Italy. This is the highest figure since the beginning of 2015. Meanwhile, around half of agents also say that the main reasons for stopping a sale are that the value of offers considered too low by the seller and the price set by buyers is too high.

The share of sales financed by mortgages in Italy also fell, especially in large metropolitan areas, to 64.1%. The ratio of loan amount to property value remains high, around 76%, declining slightly compared to the previous survey.

Rental growth in Italy

Every second operator reports rental growth in all geographical zones, especially in southern and central Italy, approaching the levels of the north. And according to most operators, further increases are expected in the second quarter of 2023, while there is also a decrease in the discount compared to the original landlord requests.

Prospects for real estate in Italy according to market experts

As for the future of the sector, general pessimism among experts prevails, even for a two-year horizon. New sales orders are often forecast to decline in the second quarter, and the gap between expectations of growth and lower sales prices is widening.

A decline in housing demand is expected due to inflation, as well as recent government changes regarding the super bonus, which are related to new restrictions on credit transfer and may negatively impact the number of potential buyers and sale prices overall. On the other hand, half of the operators expect that these changes will not have a significant impact.