The interviews for the joint Bank of Italy and Tecnoborsa quarterly survey of the Italian housing market were carried out between 22 April and 26 May 2009. A total of 929 real-estate agencies took part, providing information on sales and prices in the quarter January–March 2009 and on the outlook for the sector.
Main Findings
House prices
In the first quarter of 2009 the balance of opinions concerning an increase or decrease in house prices was negative by 59.9 percentage points, compared with –54.8 points in the last quarter of 2008. As in the previous surveys, estate agents’ assessments pointed to a widespread downward drift in prices in the North-East and in urban areas (i.e. with a population of over 250,000 in the main town) throughout the country.
Number of completions
During the first quarter of 2009 about two-thirds of estate agencies sold at least one property, virtually the same proportion as at the end of last year; the percentage was again higher in regions in the North-East at 79.1 per cent, compared with around 60 per cent in the other areas of the country. Overall, an estimated 135,00 sales were completed through an estate agent, down about 5 per cent on the previous quarter.
Properties registered with estate agencies
The balance of answers indicating an increase or a decrease in the number of unsold properties still on estate agencies’ books at the end of the quarter showed almost no change from the previous survey (32.6 percentage points against 34.7 points). The share of agencies reporting an increase in properties newly registered with them during the quarter rose from 38.5 per cent in the last quarter of 2008 to 42 per cent, while the share of those indicating a decrease remained unchanged at 24 per cent. “Lack of offers due to too-high asking prices” was cited as the main reason for contract cancellation by 65.9 per cent of agencies, followed by “offers dismissed as too low by sellers” (53.4 per cent of agencies) and “buyer’s difficulty obtaining a mortgage” (50.3 per cent).
Negotiations and selling times
In the first quarter of 2009 actual selling prices were 11.8 per cent below the seller’s asking price, compared with a difference of 9.5 per cent in the previous survey. The gap was slightly wider in the Centre and South of the country and particularly for properties inside urban areas. Average property selling times were unchanged at almost 7 months.
Financing property purchases
Some 70.4 per cent of homes were bought by taking out a mortgage, rising to 73.2 per cent in urban areas and falling to 67.3 per cent in non-urban areas. The gap was widest in the South (73.4 per cent in urban areas against 61.9 per cent in non-urban) and negligible in the Centre. The average ratio between the amount of the mortgage and the value of the property was 71 per cent, in line with the previous survey, with virtually no geographical differences.
Prospects for agencies’ local markets
Agents’ pessimism regarding market prospects has begun to lift. In the current quarter, more than half the estate agencies report market conditions to be “normal”, compared with 18 per cent in the previous survey; the balance between “unfavourable” and “favourable” assessments has narrowed to around 7 percentage points. The difference between forecasts of an increase and a decrease in the number of properties newly registered with agencies is still positive, although diminishing (11.8 against 15.2 percentage points), while the proportion of agencies expecting the number of new contracts to remain stable has risen from 45.3 to 55.6 per cent. Again for the current quarter almost 48 per cent of estate agencies expect prices to fall, against only 2.7 per cent that forecast an increase; however, the balance between the two replies is almost 15 percentage points lower than it was in the first quarter of the year. In all areas of the country, expectations that prices will fall are sharper in towns and cities, while forecasts of stable prices predominate in non-urban areas.
Prospects for the national market
Pessimism regarding the short-term prospects of the housing market at national level are lifting: the balance between expectations of a deterioration and an improvement in three months’ time has narrowed to 21 per cent from 56.2 per cent in the previous survey. Assessments remain positive for the medium term (two years): over this horizon, 65.6 per cent of estate agencies think the general situation will be better than at present, compared with 12.4 per cent who foresee a deterioration (against 45.2 and 35 per cent respectively in the end-2008 survey).
