Roundup: Italy's housing market grows for 5th consecutive year in 2018, prices still downward

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ROME, May 23 (Xinhua) -- Italy's residential real estate market posted a 6.5 percent annual increase in terms of volume in 2018, marking the fifth consecutive year of growth, the national Revenue Agency and the Italian Banking Association (ABI) said in a latest report.

At the same time, average house prices kept showing a downward trend, although limited.

Some 578,647 transactions were registered across the country last year, which made the highest figure since 2010, with an overall turnover of 94.3 billion euros (105.4 billion U.S. dollars), according to the report.

Geographical trends showed the highest increase in house sales was seen in Italy's northeast regions (10.2 percent), followed by major islands (Sicily and Sardinia, 7.7 percent), central regions (6.4 percent), and northwest and southern regions (5.6 percent and 3.8 percent, respectively).

Among Italy's 20 regions, the only one posting a decrease in sales was southern Basilicata, with a 5.9 percent drop, the Revenue Agency's real estate market observatory and ABI stated.

As for the main cities, the most dynamic residential markets proved to be those in central Bologna (10.5 percent), Sicily's Palermo (7.7 percent), and Naples in southern Campania region (5.9 percent).

Data also showed the number of houses purchased by households through a mortgage loan rose by 8.8 percent to some 282,199 in 2018 compared to the previous year.

"Credit institutions lent a total of 35.7 billion euros, and an average 126,000 euros for each loan," the report explained.

The average interest rate dropped by 0.22 percentage points to 2.17 percent, and the average period for repayment remained stable at 22.9 years, while the average monthly loan payment decreased by 2.1 percent to 585 euros.

On the downside, house prices kept decreasing, albeit slightly. The average price dropped by 0.2 percent in 2018 against the previous year, confirming a negative trend ongoing since 2012.

"Unlike the European average, prices remained essentially stationary between 2008 and 2011, and began to fall significantly in 2012, albeit at a slower pace in the last two years," the report highlighted.

"In the rest of Europe, house prices have been rising since 2014."

This prolonged disconnection between the positive trend in sales and the downward trend in house prices was seen as a major peculiarity for the market, according to a senior analyst.

"The last year in which house prices showed a positive change in Italy was 2007, and this is an anomaly," said Luca Dondi, managing director of Bologna-based Nomisma research institute and former manager of its Real Estate Market Observatory.

"It has never happened before that the sales trend stays positive for five consecutive years, and yet does not trigger an expansionary dynamic of prices," he told Xinhua.

The economist warned the residential market might perform less good in the current year.

"The latest 2018 data are indeed positive, but it is possible that they are providing a picture a few months old," he explained.

"The trends we have registered in the first months of 2019 are in fact less positive, although slightly so, and this is not unexpected given the macroeconomic worsening."

In light of these signals, the analyst forecast the number of residential sales this year might remain at the same level as in 2018, while prices would further drop slightly. Enditem

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