The interviews for the Italian Housing Market Survey were carried out between 8 and 29 January 2016. A total of 1,247 estate agents handling third parties’ property took part, providing information on house sales and lettings and related prices in the quarter October-December 2015 as well as on the short-term outlook for the sector.
The main findings
House prices
The proportion of estate agents that reported selling prices were falling continued to diminish in the fourth quarter of 2015; at 46.4 per cent they were in a minority for the first time since spring 2011 (compared with 67.6 per cent in the survey a year ago). The majority of agents (52.3 per cent - up from 31.6 per cent) judged prices to be stable. The improvement reflects above all a trend under way in urban areas and in the north of the country, where just over 40 per cent of the replies indicated a decline in house prices.
Sales
The proportion of estate agents that sold at least one property rose to 77.8 per cent, from 71.6 per cent in the previous survey. During the quarter the majority of properties handled by estate agents had a surface area of up to 140 sq.m., were fit for habitation or required partial modernization, and had a low energy efficiency rating. Demand conditions remained positive. The balance between the share of estate agents reporting an increase in potential buyers and the share reporting a decrease was 15.6 percentage points; this is some 10 points higher than in the October survey, which is usually affected by seasonal factors (the balance was -16.2 points in the January 2015 survey).
Mandates to sell
The balance between the replies indicating an increase and a decrease in the stock of mandates to sell narrowed to 6.4 percentage points from 18.0 points in October and 20.1 points a year earlier. The balance for new mandates to sell was virtually stable at 10.5 points. Estate agents were of the opinion that the withdrawal of mandates was mainly due to the gap between asking prices and offers. In fact, the percentage reporting that sellers considered the offers received to be too low was more or less unchanged at 59.8 per cent, while the share reporting that buyers thought asking prices were too high was up from 58.6 per cent in the previous survey to 61.1 per cent. The proportion of estate agents that attributed the loss of mandates to buyers’ difficulties in obtaining a mortgage was generally stable (28.4 per cent against 35.7 per cent a year earlier).
Negotiations and selling times
The average discount on the initial asking price fell slightly, to 14.2 per cent, bringing the total decrease since January 2015 to about 2 percentage points. The average time between the start of a mandate to sell and the sale of the property was virtually unchanged at 9.1 months, compared with 9.4 months reported in October.
Financing house purchases
Some 68.5 per cent of house purchases were financed with a mortgage, compared with 65.7 per cent in the October survey. The loan-to-value ratio held steady at 64.7 per cent.
Lettings
The percentage of estate agents who reported that they had let at least one property in the fourth quarter was slightly lower than in the previous survey, amounting to 82.4 per cent against 84.8 per cent. This was still almost 1.5 percentage points higher than in the second quarter of 2014. The balance between the replies indicating an increase and a decrease in rents narrowed to -30.2 percentage points from -32.2 points in last October’s survey and -50.6 points in January 2015; by contrast the share of responses indicating no change in rents was stable at 63.1 per cent. For the current quarter the balance between expectations of an increase and a decrease in rents has narrowed by about 7 percentage points, to -13.6, while 81 per cent of estate agents (up from 78 per cent) expect rents to remain stable. The average discount on rental prices compared with the initial asking price was unchanged at 6.3 per cent. The balance between the replies indicating an increase and a decrease in new mandates to let widened from -7.7 percentage points in the previous quarter to -10.9 points. Replies that new mandates are stable continued to predominate, however, accounting for 63.5 per cent of estate agents.
Outlook for agents’ own market
Estate agents’ opinions regarding the short-term outlook for their own market showed an improvement. The balance between positive and negative expectations for the current quarter widened to 15.9 percentage points from 7.4 points in the previous survey. This trend was common to all the main geographical areas. The outlook for new mandates to sell was also better than in the previous survey: the balance rose almost 4 percentage points to 16.7. The share of estate agents predicting a drop in prices in the current quarter decreased further, from 42.6 to 35.2 per cent, while the percentage expecting prices to hold stable rose from 56.1 to 62.5 per cent. The more optimistic outlook concerning falling prices was most evident in urban areas and in the North East and Centre of the country.
Outlook for the domestic property market
For the first time since the third quarter of 2010 the balance of opinions regarding the short-term outlook for the domestic market was markedly positive, going from virtually nil in the previous survey to 8.1 percentage points. Expectations for the medium-term (two years) are increasingly optimistic: the share of estate agents forecasting an improvement has risen to 55.9 per cent from 53.1 in October and the share expecting the market to hold stable is down; expectations of a deterioration have fallen sharply, from 12.1 to 10.5 per cent.
