Every year, punctually, we publish articles with the aim of to take stock of the situation of the Italian real estate market.
As we did in 2022
, also for 2023 we aim to follow the evolutions of this fascinating and always moving sector until the end of the year.
2023 is a year that could be described as aroller coaster for the Italian real estate market. After a period of sustained growth, the sector is showing signs of uncertainty and volatility. But what is really happening? Let’s go into detail to examine the data, trends, and implications for the future.
January to present: how the housing market has fared so far
If 2022 was the year of recovery, 2023 is the year of real examination. The first quarter saw a significant decline in real estate transactions, down 8.3 percent. Milan and Bologna are the most impacted cities, with declines of 23.9 percent and 22.9 percent respectively.
This trend was particularly pronounced in the Northwest, where the capital municipalities experienced a 12.5 percent decrease in transactions. These data,
reported by Wall Street Italy in a June article
, suggest that the market is going through a period of correction, likely due to a combination of factors such as economic uncertainty and rising interest rates.
An overview of average costs and trends
Despite the decline in transactions, house prices in Italy have shown year-on-year growth, with an average increase of 3.1 percent in 2023. However, in July, prices stopped rising. This could be a warning sign for the market, indicating possible stagnation or even a correction. According to data from Qui Finanza in an August 2023 article, the average price per square meter is 2,126 euros, with peaks of 5,270 euros/sqm in Milan and 4,738 euros/sqm in Bolzano.
How are we doing with mortgages and rates?
The year 2023 was also turbulent for the mortgage market. The European Central Bank has raised interest rates as many as nine times, making mortgages and loans more expensive, especially those with variable rates.
This has had a significant impact on the purchasing power of households and small and medium-sized businesses, which have seen credit opportunities shrink. This situation could explain the stagnation of house prices in July 2023, as reported by Qui Finanza.
We looked at mortgage trends and how they affect the housing market in this in-depth article:
An overview of rental market trends in Italy
Rents in Italy are following a different trajectory. According to Idealista, the average cost of renting rose 1.4 percent in August 2023, a year-on-year change of 11.9 percent. This increase was more pronounced in some regions such as Valle d’Aosta, Trentino-Alto Adige, and Puglia, which recorded increases well above the national average.
If you are interested in getting a comprehensive report on the evolution of rental housing prices in Italy, Idealista offers a comprehensive overview by region, province and municipality.
Find out rental price trends in the area of your interest.
Difficulties and challenges for the future
The Italian housing market is going through a period of uncertainty. Rising interest rates,global economic instability, and geopolitical tensions are just some of the challenges the industry will face in the near future. In addition,technological innovation and digitization are changing the way people buy and sell homes, adding another layer of complexity.
Real estate prospects and opportunities for the future
Despite the challenges, the market also offers several opportunities. Rising prices, for example, could be good news for long-term investors. In addition, the adoption of new technologies such as blockchain and artificial intelligence could make the market more efficient and transparent, offering new opportunities for both buyers and sellers.
2023 is a crucial year for the Italian real estate market. With a host of challenges and opportunities on the horizon, it is more important than ever to stay informed and prepared. By keeping an eye on current and future trends, both buyers and investors can make more informed and strategic choices, thereby maximizing their opportunities in an ever-changing market.
If you want to read the latest thoughts on the 2023 housing market, here is the article with the overview of the last year and predictions for the 2024 housing market. Read here.
