The interviews for the Italian Housing Market Survey were carried out between 31 March and 5 May 2016. A total of 1,004 estate agents handling third parties’ property took part, providing information on house sales and lettings and related prices in the quarter January-March 2016 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 first quarter of 2016 to 44.8 per cent (46.4 in the previous quarter, 59.3 in the survey a year ago), while the share of agents that judged prices to be stable remained largely unchanged at 52.4 per cent. The improvement reflects above all the trends under way in the North-East and South of Italy.
Sales
The proportion of estate agents that sold at least one property again rose, to 79.9 per cent, from 77.8 per cent in the previous survey, continuing a trend under way since the first quarter of 2015. Demand conditions were positive: the balance between the agents reporting an increase in the number of potential buyers and those reporting a decrease rose to 17.2 percentage points, from 15.6 in the previous survey and 5.5 in the survey one year earlier.
Mandates to sell
The balance between the replies indicating an increase and a decrease in the stock of mandates to sell stabilized at 7.0 percentage points from 21.1 a year earlier, with a slight decline in the balance for new mandates to sell (8.9 percentage points, from 10.4 in January). Estate agents were of the opinion that the withdrawal of mandates was mainly due to the gap between asking prices and offers: the percentage reporting that sellers considered the offers received to be too low grew to 60.8 per cent, from 59.8 in the previous survey, while the share reporting that buyers thought asking prices were too high fell to 54.8 per cent from 61.1 per cent. The proportion of estate agents that attributed the expiry of mandates to buyers’ difficulties in obtaining a mortgage also fell (24.6 per cent against 28.4 per cent in January and 30.9 per cent a year earlier).
Negotiations and selling times
The average discount on the initial asking price fell slightly, to 13.8 per cent from 14.2 in January. The average time between the start of a mandate to sell and the sale of the property also fell, to 8.6 months from 9.1 in the previous survey and 9.8 a year earlier largely owing to the fall in average selling time in the North of Italy.
Financing house purchases
The proportion of house purchases financed with a mortgage grew to 73.8 per cent, compared with 68.5 per cent in the January survey. The loan-to-value ratio also increased, to 69.3 per cent from 64.7 per cent.
Lettings
The percentage of estate agents who reported that they had let at least one property in the first quarter grew compared with the previous survey, amounting to 84.8 per cent against 82.4 per cent. The balance between the opinions indicating an increase or a decrease in rents remained negative at -27.5 percentage points from -30.2 percentage points in the January survey, while the share of opinions indicating no change in rents increased to 65.1 from 63.1 per cent. For the current quarter the negative balance between expectations of an increase and a decrease in rents accentuated, though a large majority of estate agents expect rents to remain stable (81.1 per cent). The average discount on rental prices compared with the initial asking price fell slightly to 5.8 per cent from 6.3 per cent in the previous quarter. The negative balance between the replies indicating an increase and a decrease in new mandates to let remained largely stable at -10.5 percentage points, as did the percentage of estate agents indicating that new mandates are stable (63.5 per cent).
Outcome for agents' own market
Estate agents' opinions regarding the short-term outlook for their own market remained favorable, albeit less than in the previous survey: both the balance between positive and negative expectations for the current quarter and that in relation to the outlook for new mandates to sell remained positive. The share of estate agents predicting a drop in prices in the current quarter decreased further, from 35.2 to 31.8 per cent, while the percentage expecting prices to hold stable rose from 62.5 to 64.7 per cent; this trend was most evident in non-urban areas and in the North-East and Centre of the country.
Outlook for the domestic property market
The balance of opinions regarding the short-term outlook for the domestic market was positive for the second consecutive quarter, going from 8.1 percentage points in the previous survey to 9.2 percentage points. Expectations for the medium-term (two years) are increasingly optimistic: the balance of the share of estate agents forecasting an improvement and that of those expecting a worsening continues to grow (to 46.4 from 45.4 per cent).
