Stability Returns to Italian Housing Prices

House prices in Italy have remained mostly unaltered since the global financial crisis in 2008. This is contrary to what most countries in Europe have experienced. Also, many …

House prices in Italy have remained mostly unaltered since the global financial crisis in 2008. This is contrary to what most countries in Europe have experienced. Also, many experts project Italian house prices to rise in the next two years. See the following article from Global Property Guide for more on this.

Unlike most countries in Europe, Italy did not experience sharp house price falls with the global financial crisis. After rising more than 70% from 1998 to 2008, the house price index has largely been unchanged since the crisis, falling 0.3% y-o-y to H1 2010 (the most recent data available), according to the Bank of Italy.

Stability of house prices was also reflected in figures from Nomisma, an independent economic think-tank. The average existing house price in 13 major cities was largely unchanged (-0.6%) in the first half of 2010 compared with the second half of 2009. The price of new houses was also relatively stable (-0.5%) over the same period.

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House price increases occurred in the cities of Cagliari (0.4%), Catania (0.2%) and Genoa (0.2%) from H2 2009 to H1 2010 – a contrast with 2009, when all cities registered price falls.

Sales volumes are starting to recover. Residential sales are projected to rise by 2.2% to around 620,000 units in 2010, according to Nomisma.  This, however, is significantly lower than the almost 850,000 units sold in 2007.

Real estate agents surveyed by the Bank of Italy are optimistic. Over the next two years, 61% expect the overall housing market to improve, 26% see no changes while the remaining 13% anticipate worsening conditions.  Nomisma expects house prices in the 13 major cities to remain stable in 2011.

Yet robust house price increases are unlikely, due to weak economic growth, worsening public finances and political instability surrounding Prime Minister Silvio Berlusconi’s government.

This article was republished with permission by Global Property Guide.

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