Housing market, Bank of Italy: Weak demand, less unfavorable developments in the first three months of 2024

A "Comparative Survey of the Housing Market in Italy" for the fourth quarter of 2023 has been published. According to the quarterly study by the Bank of Italy, conducted among 1,501 real estate agents from January 8 to February 5, 2024, the price dynamics in the real estate market in the fourth quarter of last year generally slowed down; stability assessments remain predominant (more than two-thirds of operators).

Based on the Bank of Italy survey for the fourth quarter of 2023:

Stability assessments prevail (expressed by 65 percent of agents), while the percentage of operators reporting price increases continues to decline, dropping to 9 percent, about 15 percentage points lower than the peak recorded in the first quarter of 2022, with 25 percent of operators noting a decrease.

• The average decrease compared to the seller's initial requirements is 8.6 percent;
• Approximately 40 percent of sold housing had small sizes (less than 80 square meters);
• Real estate with lower energy consumption (F-G) accounted for almost 60 percent of the total transaction volume and just under two-thirds in urban areas;
• Approximately 40 percent of agents noted a decrease in both new assignments for sale and potential buyers.

Important points:

• 27 percent of operators report difficulties in obtaining mortgages from buyers.
• The share of purchases financed by mortgages has decreased since the end of 2021 and now stands at 56.9 percent.

Operators' expectations for the first quarter of 2024 have become less pessimistic regarding both their own market and the national market. The rental market remains tight, with pressure on rental prices to increase.