The rate increase burns the real estate growth of 2022: it takes three years of salary to buy a house

2022 was a good year for the residential real estate market, but the rise in rates at the end of the year began to curb purchases with an effect that continues into 2023 as well, making it less accessible to take out a mortgage to buy a house. And yet property prices, only slightly up, compared to a recovering economy and incomes, have slightly decreased the number of salary days an average family needs to buy a house: 3 years and 80 days, a further drop in the months of this year and much lower than 2010 when it took over 4 years. The photograph of the Abi-Agenzia delle Entrate report thus shows a market with trading at the record level of the last sixteen years on which, however, the cold shower of the ECB’s grip has hit. Last year there were 780,000 homes bought and sold, over 30,000 units more than in 2021 (+4.7%) even if the decline was 2.1% in the last quarter. The provincial capitals have been more resistant to the dynamics of decline. Italians now have to deal with mortgage rates at 4% after a decade of abundant liquidity as well as the effects of high inflation which are affecting some sectors of the population. As the report repeats several times, these are levels that are in any case lower than those of the years before Draghi’s breakthrough on zero rates, with respect to which the comparison is still positive. The affordability index which summarizes the analysis of the various factors (disposable income, house prices, trends, interest rates on mortgages) was down by 1.2 percentage points compared to the previous year. “Despite this reduction, the levels of the index are still significantly high in historical comparison”. The report then reserves one point on a hot topic these days: Milan, but also Bologna and Naples, are scarce in the number of house rentals through subsidized lease agreements for students. In absolute terms, over 5,600 properties were leased in Rome during the year”. “It should be noted once again the data relating to Milan and Naples where the properties registered under this type of contract are numerically of little importance, as well as that of Bologna where , despite the high student population, there are approximately 350 contracts relating to this typology”. The total annual rent exceeds 300 million euros with an average annual rent per surface unit of over 81 euros per square metre. On average, the the highest unit rent is recorded in the capital with 140 euros per square metre.