The share of real estate purchases financed with a mortgage began to rise again in the first quarter of 2024, while the ratio between the amount of the loan and the value of the property remained stable. This was reported by the real estate agents interviewed in Economic survey on the housing market in Italy conducted by Bank of Italy And Tecnoborsa.
The survey, carried out among a panel of approximately 1,300 – 1,400 real estate agents who are interviewed quarterly, shows an improvement in the conditions of access to credit for those who want to buy a home and highlights an increase in sales assignments.
The difficulties of obtaining a mortgage have eased
For the second consecutive quarter, the share of agents reporting the difficulty in obtaining a mortgage from buyers as one of the main reasons for ceasing to sell has decreased, reaching 23.7%, “more than ten percentage points below the values achieved in the third quarter of 2023”, specifies the investigation by Bank of Italy and of Tecnoborsa. The percentage of mortgage-financed purchases returned to growth for the first time since the end of 2022, reaching 62.5%; the ratio between the amount of the loan and the value of the property remains substantially stable, at 77%.
In line with previous findings, the main causes of termination of the assignment to sell remain the value of the offers received deemed too low by the seller or the asking price deemed too high by potential buyers.
| Trades | 2023 | 2023 | 2023 | 2023 | 2024 |
| Agencies that have sold at least 1 property | 84.2 | 84.2 | 80.8 | 86.9 | 83.8 |
| Average discount | 8.2 | 8.5 | 8.5 | 8.6 | 8.3 |
| Sales times (months) | 5.5 | 5.8 | 5.9 | 6 | 5.7 |
| Share of purchases financed with a mortgage | 64.1 | 64.1 | 63.4 | 56.9 | 62.5 |
| Ratio between loan and property value (LTV) | 76.6 | 76.7 | 77.3 | 77.6 | 77.2 |
Source: Economic survey on the housing market in Italy
Stable housing prices
In the first quarter of 2024, the share of operators reporting stability in house prices remains largely prevalent (65.7%). The percentage of agents reporting an increase in prices compared to the previous quarter began to rise again after three quarters of decline (to 13.9% from 9.2 in the previous survey), remaining however lower than that of those reporting a reduction ( 20.5%).
The average price discount and sales times remain at very low levels
The average discount, compared to the seller’s initial requests, stood at 8.3%, in line with the very low values recorded in the last two years. The time elapsed between the assignment of the assignment and the sale is still very short (5.7 months), just above the minimum recorded since the start of the survey a year ago.
The share of agents who have concluded at least one transaction remains high…
The share of agencies that sold at least one home returned to levels close to those of the first quarter of 2023, remaining high in historical comparison (83.8%). However, the balance between agencies that declare an increase in intermediated transactions and those that experience a reduction compared to the same period of the previous year is negative (-22 percentage points); the same trend is found compared to the fourth quarter of 2023 (-17.5). 81.6% of operators brokered exclusively pre-existing homes, a share substantially similar to the previous survey.
Weak supply and demand conditions
The percentages of agents experiencing an increase in assignments to process (14.5% from 12.8 in the last survey) and new sales assignments (16.4% from 14.6%) increased slightly but remain largely prevalent indications of a decline (40.6% from 42.8%). The balance between the opinions of increase and decrease in the number of potential buyers has become less negative (-19.3 percentage points, from -28.7 and -26.4 respectively in the fourth and first quarters of 2023)
The strong growth in rents continues
The share of agents who experienced an increase in rents in the reference quarter compared to the previous period increased again, reaching a new high since the start of the survey (53.1%) and being over 49 percentage points higher to that of those who notice a decrease. 38.1% of agencies expect further increases in the current quarter, a marginal decrease compared to the same period of the previous year. The average discount on the requested rents remains at minimum values, at 2.1%. The percentage of operators reporting a decrease in rental assignments stands at 45.4% compared to 7.6% of those reporting an increase. The lower offer is indicated by 41.2% of operators as the underlying reason for the increase in rents, in turn mainly caused by the owners’ preference for short-term rentals, especially in urban areas. Demand, however, would be significantly supported by the difficulties of some categories of buyers in purchasing properties.
Pessimism in agents’ expectations continues to ease
For the second consecutive survey, the pessimism in agents’ expectations for the current quarter was significantly reduced, both in relation to their reference market and in relation to the national one; conditions are also considered less unfavorable compared to the corresponding quarter of 2023. Over the two-year horizon, expectations showed a marginal improvement, after the more marked one recorded last quarter, remaining overall weak. The balance relating to the outlook for price trends in the current quarter continues to become decidedly less negative, due to the sharp decrease in the share of operators with expectations of further reductions (to 24.6% from 31.5).
Some predictions on the effects of the “Green Homes” directive are moderated
Compared to the survey carried out in the first quarter of 2023, the assessments on the potential effects expected for the current year of the directive on the energy performance of buildings (Energy Performance of Buildings Directive, also commonly known as “Green Houses”) recently approved at national level have moderated. European and amended in 2023. In particular, “the perspective regarding the influence of the directive on the demand for homes to be renovated has been reversed, which presents a slightly positive balance in the latest survey (2.2 percent), from negative last year. However, expectations regarding the demand for highly energy efficient homes and the trend in sales prices of low energy efficient homes remain very clear; the balance between operators who expect an increase and those who expect a decrease is equal to +74.7 and -62.2 percent respectively”, concludes the analysis.
