According to preliminary estimates, in the second quarter of 2023, the Housing Price Index (HPI) for homes purchased by families for residential or investment purposes increased by 2.0% compared to the previous quarter and by 0.7% compared to the same period in 2022 (compared to 1.0% growth in the first quarter of 2023).
The year-on-year increase in housing prices is attributed to both new home prices, which grew by 0.5% annually, significantly slowing down compared to the previous quarter (which saw a 5.3% increase), and existing home prices, which rose by 0.8% (a slight acceleration from the 0.3% in the first quarter).
These trends are occurring in the context of a significant reduction in property sales volumes, with a year-on-year decline of 16.0% recorded in the second quarter of 2023 by the Real Estate Market Observatory of the Revenue Agency for the residential sector, following an 8.3% decline in the previous quarter.
On a quarterly basis, the HPI’s dynamics (+2.0%) can be attributed to both new and existing home prices, which increased by 2.0% and 1.9%, respectively.
The year-to-date variation rate for HPI in 2023 is +1.4% (+3.8% for new homes and +0.9% for existing ones).
In all geographical regions, there is a growth in housing prices on a quarterly basis, while on an annual basis, the dynamics differ. In Northern regions, housing prices continue to rise, accelerating in the Northwest (from +2.0% to +2.5%) and slowing down in the Northeast (from +1.9% to +1.1%). In the Central and Southern regions, however, annual trend rates are negative, at -0.7% and -1.5%, respectively (compared to +0.1% and -0.7% in the previous quarter).
Housing prices are on the rise in all cities for which HPI data is released. Milan registered a 7.1% year-on-year increase, accelerating compared to the previous quarter (which was +5.8%). Turin follows, with an annual increase of 4.1% (compared to 0.7% in the previous quarter), while Rome showed the slowest growth, at 0.6%, decelerating from 1.9% in the previous quarter.
Analysis
In the second quarter of 2023, the trend of slowing down the annual dynamics of housing prices continued, dropping to 0.7% from 5.2% in the second quarter of 2022. This deceleration is mainly due to the slowing growth of new home prices, which increased by only 0.5%. On a regional level, the annual evolution of housing prices is contradictory, with prices rising in the North (with Milan standing out) and declining in the Central and Southern regions.
The year-on-year slowdown in housing prices in the second quarter of 2023 occurs in the context of a new decline (the third consecutive one) in the volumes of residential property transactions.