Italian Real Estate

Italian mortgage market recovering

Posted on | July 14, 2010 | No Comments

The economic crisis has not spared anyone, not even “il mattone” (Italian for “the brick” as they call the real estate sector), one of the Italian’s most loved areas. But the estimated fall in prices of Italian real estate sector was lower than in other European countries. New and mortgages recovering also.


The impact of the economic crisis in recent years has also affected the Italian real estate sector, driving prices lower but the negative impact was not nearly as strong as in other European countries.

According to a study by Banca Monte dei Paschi di Siena, bank credit is supporting the recovery of the housing market with the stock of mortgages is growing more than elsewhere in Europe.

The year opened with a revival of the Italian property market in terms of trading volume (+3.4% YoY in the first quarter 2010) with the increase in the residential sector even higher (+4.2% to / s). While experts forecasts for this year predict a stabilization of the sector with prices stable or at worst a decrease of 2% and trading in the range between 0% and +2%, the coming months will show if the positive data and good performance will keep going and consolidate.

In the to households sector there was evidence of an acceleration in the first quarter of 2010 (+7.6% YoY). The Italian market is growing at a faster rate than the European average with the market share of total increasing to 8,2% in March 2010. Significant growth in the first quarter of 2010 was also recorded in borrowing flows (according to a sample from ABI: +14.9%). Expectations for year-end are for a rise in the variable rate around 40 basis points and a smaller increase in the fixed rate (+20 bp).

Despite the reduction in fixed/variable-gap, even in 2010 variable seem to be the preferred option. In the first 3 months of 2010, 74% of the total were variable rate .

The burden of mortgage payments in 2009 is on average about 16% of disposable income for households, down about one percentage point from 2008. The reduction is due to lower interest rates occurred in 2009 in addition to various intervention and support measures to redefine the contract terms.

In summary it seems the Italian Real Estate market has suffered, but the impact was limited and according to the above mentioned study of Banca Monte dei Paschi di Siena Italy can boast of the primacy of the European country whit the smallest average price drop.


Take a look at the following interesting site about buying Italian properties:

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