Overall, a positive week for the real estate sector, which benefits from the signs of market expansion, despite the persistent economic crisis that has hit the major developed economies due to the war in the Middle East and despite the signs of a tightening of the monetary policy of the Fed and the ECB. A trend that is somehow also anticipated by the surge in government bond yields, starting with American T-bonds.
ECB ready for a rate hike
The ECB is on a more restrictive path and a rate increase in June is now almost taken for granted, even if in her last speech at the end of the Eurogroup, President Lagarde did not want to go too far. While warning of persistent risks on inflation, the Eurotower number one confirmed a prudent but vigilant approach, not offering any ideas on future moves and reiterating “we will continue to follow a data-dependent approach on a meeting-by-meeting basis”.
Fed Minutes confirm imminent change
The Fed minutes confirmed the possibility of a reversal of monetary policy. At their last meeting in late April, FOMC members generally believed that “persistent high levels of inflation, coupled with uncertainty regarding the duration and economic implications of the conflict in the Middle East, may make it necessary to maintain the current monetary policy stance for a longer period than previously expected.” However, “the majority of participants highlighted that some tightening of monetary policy would probably be necessary if inflation continued to remain persistently above 2%”.
The macro data of the week
Mortgage applications are decreasing in the United States. In the last week, the index recorded a decrease of 2.4%, after the +1.7% recorded the previous week. The index relating to refinancing requests is almost stable, while that relating to new applications decreased by 4.1%.
Sales of existing homes in the United States recorded an increase of 0.2% on a monthly basis in April, after the -2.9% reported in March, while on an annual basis, sales remained unchanged.
Positive data arrives in April from the American construction market. According to the US Department of Commerce, new construction sites started recorded a lower-than-expected decline of 2.8%, while building permits issued by the competent authorities recorded an increase of 5.8%.
News from the sector
The usual Revenue Agency report on the real estate market, with 767 thousand sales, up 6.4% and a turnover amounting to approximately 124 billion euros, up 8.8% compared to 2024. A positive sign also for the islands (+6.8%) and the North East (+6.4%), while the South shows more limited growth (+2.5%). The sales data relating to the eight main Italian cities by population (Rome, Milan, Turin, Naples, Genoa, Palermo, Bologna, Florence) present a heterogeneous picture: growth is more accentuated for the residential market of Palermo, Turin and Rome. Of the total homes purchased by natural persons, those purchased with the aid of a mortgage loan accounted for 45.9% of trades, for a capital disbursed of 47.2 billion euros, +25% compared to 2024.
On the mortgage front, the ABI confirmed a growth in loans to families and an increase in the rate on home mortgage disbursements to 3.43% (+6 cents compared to the previous month; 4.42% in December 2023).
The latest Istat report on production in the construction sector instead reported a decline of 0.7% in March compared to the previous month. On a year-on-year basis, the raw index recorded an increase of 4.4%.
The performance of the sector on the stock exchange
The real estate sector on the stock market had a very positive week, doing better than the pan-European Stoxx 600 Real Estate index which gained 2.8% on a weekly basis.
The Italian FTSE Italia All Share Real Estate index shows a solid increase of 5.5%, performing better than the FTSE MIB market index which recorded a negative balance (-1%).
Among the real estate companies listed on Piazza Affari, the best performance is that of AbitareIn which advances by 8.8% on a weekly basis. IGD (+7.3%) and Aedes (+4.1%) also did well. The worst is Brioschi, which slips by 3.8% followed by Bastogi and Risanamento, both with losses of 1.3%.
