Sales are down and house prices are up. This is the summary of the data published by Istat, according to which in the second quarter of 2020 the house price index (IPAB) purchased by families increased by 3,1% compared to the previous quarter and by 3,4% compared to the same period of 2019 (it was +1,7% in the first quarter of 2020). At the same time, based on data from the Real Estate Market Observatory of the Revenue Agency, sales volumes fell by 27,2% on a year-on-year basis after the -15,5% recorded in the first quarter.
HOUSES: PRICES GO UP
The 3,1% trend increase in house prices is the largest since the IPAB historical series was available and is attributable both to new house prices, which grew by 2,7%, and to existing house prices , up by 3,7% (they were respectively +1% and +1,9% in the first quarter). The acquired rate of change of the IPAB for 2020 is +3,2%.
“After the long sequence of declines which from 2012, with the exception of the weak recovery in 2016, followed until mid-2019, house prices are growing markedly and for the fourth consecutive quarter. In particular, the prices of existing homes accelerated, returning above the average level of 2015. However, the turnaround occurred in conjunction with the crisis caused by the health emergency which greatly reduced home sales and the prices in the period in question mostly referring to contracts whose terms were established before the lockdown” comments Istat.
The significant growth in house prices, Istat points out again, consolidates the trend that began in the second half of 2019 and refers to contracts signed between April and June but whose conditions were mostly perfected in the pre-lockdown period.
TRADES: VOLUMES DOWN
As mentioned, due to the lockdown and the restrictions imposed by the government to deal with the coronavirus pandemic, the volume of sales fell by 27,2% in the second quarter. The decline mainly concerned the first part of the quarter and was largely reabsorbed in June, without foreshadowing for now, a generalized and persistent decline in demand such as to influence the price trend in the short term.
HOUSE PRICES: INCREASES IN MAJOR CITIES
House prices have risen in all geographical areas. The most consistent increase was recorded in the North-West (+5,5%) and in the North-East (+4,1%), while in the South and in the islands the increase was equal to 2,3%. Lower growth rate for the Centre, which marks +0,9%.
As for individual cities, house prices soared in the second quarter a Milano, which rose on an annual basis by 15,9% (+3,8% on the previous quarter). "The increase - says Istat - is attributable to both the prices of new homes and those of existing homes." Respectively the growth is 18,3% and 15,7%. Conversely, at the economic level, the prices of new homes decreased by 0,7%, those of existing homes increased by 4,9%.
House prices also rise to Torino, but less than the previous quarter: the data show a +1,8% in the second quarter and a +2,3% in the first. The increase is exclusively due to the prices of existing homes, which increased by 2,8%, while those of new homes decreased by 3,9%.
On a trend basis a Roma prices rose by 1,3%, from +1,8% in the previous quarter. Once again the rise is due to the prices of existing homes which grow by 1,6% while those of new homes decrease by 0,8%. On a cyclical basis, however, there was marked growth for both components (+2% for new homes and +2,6% for existing ones).
Extending the time horizon of the analysis, in the second quarter of 2020 compared to the average of 2010 house prices as a whole increased by 6,8% in Milan, decreased by 18,9% in Turin and decreased by 25,9% in Rome, where the sequence of declines that began in 2012, with the exception of the recovery in 2016, was only interrupted in the first two quarters of the current year.
