Rate cuts reduce real estate transactions: First quarter declines totaled 11, mortgages fell 31.

The increase in interest rates, making mortgage loans increasingly less profitable, has led to a decrease in the number of real estate transactions in Italy in the first quarter of 2023. According to Istat, 210,691 notarized sale and purchase transactions and other acts of transfer of real estate for consideration were registered, down 5% from the previous quarter and 11% from a year earlier.

An even more significant decline was seen in mortgages, financing and other commitments involving real estate collateral, which decreased 12.6% from the previous quarter and 31% from a year earlier. Compared to a year earlier, housing transactions are down in both large and small cities (-18.3% and -6.4%, respectively).

After eight consecutive quarters of growth recorded from the third quarter of 2020 through the second quarter of 2022, the last three quarters point to a contraction that is primarily driven by residential real estate, the engine of the entire real estate market. Mortgages, financing and other commitments involving real estate collateral foreshadow the declines seen on both an annualized and comparable basis since the second quarter of 2022.