Decline in sales and real estate prices in Italy: Istat data

According to the Italian Institute of National Statistics (Istat), residential real estate sales and prices have declined, but this trend has not spread throughout the peninsular country.

The main reason for this situation, which was expected, is the constant rise in interest rates (including the recent interest rate hike to 4.5% by the ECB), which is causing mortgage rates to rise.

Housing sales declined primarily in urban areas. Between April and June 2023, housing sales in Italy fell by 16%, i.e. 35 thousand fewer dwellings were sold compared to the same quarter of 2022.

The most affected are large cities, particularly regional capitals, where the decrease amounted to -17.2%. Things are no better in the provinces, where the decrease amounted to -15.4%. Topping the list for the most notable negative change in Italy is Bologna with a decrease of 22.8%. It is followed byRome (-21.5%) andMilan (-17.1%).

House prices are falling in the Central and Southern parts, rising in the North. In the same report, Istat also released data on the index of house prices (IPAB) purchased for residence or as an investment in the second quarter of 2023. "The slowdown in the trend of house price growth continues in the second quarter of 2023, which amounted to 0.7%, down from 5.2% in the second quarter of 2022. The new slowdown is mainly due to a decline in new home prices, which rose 0.5%," the National Institute of Statistics said in a statement.

Regional differences are also present. Home prices continue to rise in the Northwest compared to the previous quarter (from +2% to +2.5%), while slowing in the Northeast (from +1.9% to +1.1%), the Center (from +0.1% to -0.7%), and the South and Islands (from -0.7% to -1.5%).