After months of pandemic-induced gloom in the early years of the decade, a gust of recovery has significantly swept through the housing market. The year 2022 witnessed a real estate sales boom, fueled by a robust albeit nuanced demand in the preceding semesters. Housing incentives played a pivotal role, exerting a substantial impact, for better or for worse, on the sector.
Factors Driving Property Demand in Italy
Let’s delve into the primary forces driving both residential and investment property demand. First and foremost, it is linked to the GDP trend, which, in turn, influences national employment levels and shapes expectations for the future. In this case, the mathematical correlation between GDP and demand for bricks is positive.
However, it is negative when compared to the cost of money: as it rises, leading to a decline in mortgage demand, the demand for housing falls. Finally, the connection between housing demand, demographic trends (and flows), and housing quality is once again positive. In the former case, larger cities are more popular than provinces, while in the latter, we consider new constructions over homes in need of renovation.
Forecasting Real Estate Prices in Italy for 2024: Rise or Fall?
Now, let’s address the predictions for housing prices in Italy for the year 2024, using the insights from the research conducted by the Tecnocasa research bureau.
Market Dynamics and Property Types:
What do the estimations of a well-known real estate group suggest for the current year? In summary, it is asserted that:
- Prices for the most popular and larger types of homes may see a slight decrease. Here, credit challenges, understood as high-interest rates and greater caution from banks in their disbursement, will play a significant role.
- However, constant values are expected for premium, elegant, and new typologies, whether energy-efficient or not.
- Prices may also decrease for properties in need of renovation and requiring significant construction work. Considering the current cost of labor, it is thought to be wiser to invest more initially and buy new rather than purchasing an old property, spending a lot, and ultimately not acquiring a modern home.
- Geographically, prices in major cities are anticipated to hold up better than anywhere else.
Impact on Sales Duration:
It is anticipated that the average sales time will slightly increase due to a substantial gap between the expectations of sellers and the willingness of buyers to spend money.
In conclusion, the real estate market in Italy is in a state of flux, but stability is expected in certain segments. The recovery continues, and the future of the housing market depends on the coordinated efforts of the economy and the financial sector
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