The real estate sector closed an overall positive week, posting a better performance than the market, thanks to the repercussions of progressively decreasing interest rates and signs of market recovery. Here’s what emerged and how companies listed on Piazza Affari moved.
ECB & Co. ready for new cuts
There ECB met on Thursday and announced interest rates essentially stable at 4.25% after the cut made last month. A decision that hinges on the gradual return of inflation in the Eurozone, which fell to 2.5% in June from 2.6% the previous month and which takes into account medium- and long-term dynamics and the effects of substantially restrictive monetary policy.
There President Lagarde has also opened to the possibility of a new cut in September in conjunction with the Fed. The US central bank also strengthened expectations for an intervention in September and for a second cut before the end of the year. Conditions that will favor the mortgage market and also the sale of houses.
Good signals from the real estate market
The real estate marketmeanwhile, continues to signal a recovery. A Report of S&P on the European real estate market has house price forecast revised upwards for 2024, especially for Belgium, Portugal and Spain. This is because house prices were more resilient at the end of 2023 than expected, while home loans have recovered faster than in previous cycles. Although the rating agency believes that housing markets in most European countries have bottomed out, it continues to forecast a moderate increase in nominal house prices over the period 2024-2027. After the rate cut, the Structural factors will continue to drive housing demandwhile easing supply constraints will prevent sharp price increases.
From the macro front it emerged that the Chinese market struggling to recover and house prices slipped 4.5% in June, after falling 3.9% in May, despite Beijing’s massive stimulus package for households.
In the United States, NAHB Housing Market Index gave a small sign of deterioration, settling at 42 points in July from 43 points in June.
UK market doing wellwhere house price growth accelerated to 2.2% in July from 1.3% previously, above expectations for a 1.5% increase.
The performance of the sector on the stock exchange
The real estate sector has had a difficult week at European level, where Stoxx 600 Real Estate Index reported a -2.3% on a weekly basis.
A better performance was achieved by Italy, where the index FTSE Italia All Share Real Estate brought home a 2.5% increase, also outperforming the FTSE MIB market index which lost 0.3%.
Who goes up and who goes down
Among the real estate companies listed on Pizza Affari and composing the sector index, the worst performances are those of Restoration (-1.8%) and Cabinets (-1.1%), the latter despite EnVent Italia SIM having confirmed the Target Price of 1.50 euros and the rating of “Outperform” in consideration of the potential upside of 181%.
Bad too Next King (-0.6%), while holding Brioschi (+0.3%).
On the upside, it should be noted IGD which recorded a brilliant increase of over 3%, in clear contrast to the trend of the sector, still in the wake of the growth projects foreseen in the 2025-2027 industrial plan.
