Italian Mortgage Issuance Plummets 47 Percent in First Quarter

Lending for homeowners in Italy plummeted 47 percent in the first quarter as banks raised rates and tightened credit standards, according to a study.

“The residential mortgage market has demonstrated a progressive slowdown from the second half of 2011,” Italian credit bureau CRIF SpA said today in a joint statement with research group Prometeia and Assofin, a lenders’ association.

The drop compares with declines of about 19 percent in the three months ended Dec. 31 and less than 1 percent in the first quarter of 2011, Maurizio Liuti, a spokesman for CRIF, said by phone. Mortgages issued for renovations and purposes other than property purchase fell 80 percent in the first quarter.

Prime Minister Mario Monti passed a 20 billion-euro ($24.6 billion) austerity package in December, which included higher property taxes. Italian banks have been retreating from the mortgage market as the country’s recession pressured profits and asset quality. First-quarter home sales fell 20 percent, the biggest decline in at least eight years, to about 110,000 transactions, a Finance Ministry agency said June 19.

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