In the first quarter of 2024, theHouse Price Index (IPAB) purchased by families, both for housing and investment purposes, shows a decrease of 0.1% compared to the previous quarter and a 1.7% increase compared to the same period of 2023 (against +1.8% in the fourth quarter of 2023). “Growth on an annual basis has essentially stabilized”, explains Istat, “interrupting the slowdown phase that began in the second half of 2022”.
New homes drive prices skyrocketing
Annual price growth is mainly driven byincrease in prices of new homes, which recorded an increase of 5.4%. However, this growth rate is lower than the +8.8% recorded in the previous quarter, signaling a slowdown in the new housing market. At the same time, existing house prices contribute less to annual growth, showing an increase of 0.8%.
“The number of home sales in the first quarter of 2024 still records a reduction throughout the country,” says Istat.
In the first quarter of 2024, the real estate market experienced a significant contraction in trading volumes. According to the Real Estate Market Observatory of the Revenue Agency, the residential sector has seen a decrease of 7.2%, following the -3.3% of the previous quarter, highlighting a continuous downward trend.
This market context influenced the Housing Price Index (IPAB), which showed a slight cyclical decline of 0.1%. This decline was entirely caused by the 1.7% decrease in new home prices, while existing home prices saw a modest 0.2% growth.
The price trend stabilizes
During 2024, the Housing Price Index (IPAB) recorded a positive change of +0.3%. This result is the result of a 2.1% increase in new home prices and a 0.2% decrease in existing home prices. In the first quarter of this year, the weights used to calculate house price indices were updated, with a slight reduction in the weight of new homes to 17.36% (compared to 17.72% in 2023), while the weight of existing homes rose to 82.64% (compared to 82.28% last year).
These updates occurred in a context in which the annual growth in prices of homes purchased by families has stabilized, interrupting the slowdown that had characterized the second half of 2022.
“In the first quarter of 2024 – we read in the comment note – we have substantially the annual growth in prices of homes purchased stabilized by families, interrupting the slowdown phase that began in the second half of 2022. The growth is fueled above all by the trend in prices of new homes which increase by 5.4 percent on an annual basis, while the prices of existing homes grow by only 0 .8 percent. The number of home sales in the first quarter of 2024 continues to decline across the country.”
