Italy: Stability in Italian Housing Prices Amidst Reduced Sales Volumes

According to preliminary estimates for the third quarter of 2023, the Housing Price Index (IPAB) for homes purchased by families for residential or investment purposes remained stable compared to the previous quarter. It showed an increase of 1.8% compared to the same period in 2022, marking a notable acceleration from the 0.6% growth in the second quarter of 2023.

The annual growth of IPAB is primarily attributed to the prices of new homes, which surged by 8.0%, a significant uptick from the previous quarter’s 0.5%. Conversely, prices of existing homes rose by 0.5%, indicating a slight deceleration from the 0.7% in the second quarter.

These trends occurred against the backdrop of a significant reduction in transaction volumes, with a year-on-year decrease of 10.4% reported in the third quarter of 2023 by the Real Estate Market Observatory of the Revenue Agency for the residential sector, compared to a 16.0% decline in the previous quarter.

The stability of the IPAB on a quarterly basis reflects opposing dynamics between the prices of new homes, which increased by 1.6%, and those of existing homes, which decreased by 0.4% (compared to a 1.8% increase in the second quarter of 2023).

On average, in the first three quarters of 2023 compared to the same period in 2022, housing prices increased by 1.2%, with new home prices rising by 4.5% and existing home prices growing by 0.5%.

The accumulated growth rate of the IPAB for 2023 is 1.3% (4.7% for new homes and 0.6% for existing homes).