Italy’s home sales may fall as much as 12 percent this year amid an economic recession and as prices fall for a fourth year, research institute Nomisma said.
Transactions may decrease this year to as low as 529,306, the lowest in at least 12 years, after dropping 20 percent in the first quarter, the Bologna-based institute said in a report today. Prices of new homes fell 1.8 percent in the first half and they are 11 percent lower than a 2008 peak, according to the study based on a survey of the 13 biggest cities in Italy.
“The deteriorating economic context, coupled with more selective borrowing conditions and the widespread expectations of a wider depreciation than already recorded are the main reasons for the new halt to the real estate market,” Nomisma said.
Recession-hit Italy may contract 2.4 percent this year amid rising unemployment and Prime Minister Mario Monti’s austerity measures weighing on consumer demand, employers’ lobby Confindustria forecasts. Home sales posted the biggest drop since data collection began in 2004 in the first quarter, a Finance Ministry agency said on June 19. A new property levy, marking the return of taxation on primary residences after four years, “won’t be an incentive for the market” in coming months, the Agenzia del Territorio said in that report.
Lending for homeowners in Italy plummeted 47 percent in the first quarter as banks raised rates and tightened credit standards, according to a July 9 study by credit bureau CRIF SpA, research group Prometeia and Assofin, a lenders’ association.