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A revival in Italy’s housing market with transactions increasing by 8.2% in the second quarter of 2015

by Paola Dezza

The housing market in Italy is finally giving signs of a revival. According to figures provided yesterday by the Revenue Agency, the second quarter of 2015 registered an increase on an annual basis of 8.2% in the number of transactions, which reached 116,500 units in the country (95,454 were the sales in the first quarter of the year).

According to this memo, the transactions increased overall by 6.8%, thanks to the residential sector - which has the greatest weight in the real estate market - and the commercial one (+10.3%), while the production and service segments registered respectively -8% and -3.8%.

Certainly, political stability, the low interest rates and the economic situation in the process of brightening have played an important role in the decision by buyers to once again purchase a home, but what counted more than anything else was the slight but steady decline in prices. Istat registered a decline of 0.7% in the values of homes for the first three months of 2015 and of 3.4% when compared to the same period in 2014.

Once again the figures show a market with Rome leading the rest of the country out of the crisis. The details of the eight major cities reveal that in Turin and Palermo 16% more homes were sold compared to the previous year, in Florence 11.8% and in Milan, where the increase has continued for eight consecutive quarters, +9.2%. The increase was subtler in Rome (+5%), Genoa (+4.4%) and Bologna (+3.2%). On average the eight major cities show an increase in transactions of 7.7%, with 21,221 concluded transactions (there were approximately 17,000 in the first quarter of this year).

To recognize that the market is moving at two speeds means to note that the revival is led by the large centers,” says Gianni Guerrieri, the head of the Observatory. And this bodes well for the coming months.” Guerrieri does not offer a prediction for the closing of the year, “it's early to give the numbers,” he says, but his words reflect confidence in the revival for the next two quarters.

Returning to the geographical areas, the markets are more aligned in the North, with the capitals and smaller towns seeing an increase in transactions respectively in the order of 10.8% and of 10.1%.

In general, Rome has registered an increase of 9.6% in transactions. In the municipalities of the South, the gap widens: the housing transactions in the capitals increase almost by 10% and in the remaining municipalities the increase is of 4.1%.

It is important to highlight that the data of this second quarter in 2015 were not influenced by the tax effect observed between the end of 2013 and the beginning of 2014, when a system of registration taxes, mortgages and more advantageous land registry went into effect beginning on January 1, 2014, prompting the postponing of the deeds until the new year, contaminating in this way the figures.