The one just concluded was an interim week for the real estate sector on the stock exchange, both in Italy and in Europewith the corporate results season over. The focus returned to the moves of the two most important central banksthe Federal Reserve and the European Central Bank, which could continue to cut key interest rates in December, stimulating economic activity with benefits also for the real estate sector.
A push for a new cut in the cost of money Europe came on Friday from preliminary data from theNovember PMI survey S&P Global-Hamburg Commercial Bank 2024: Eurozone activity slipped back into contraction for the second time in three months, with the renewed decline in output being due to the decline in tertiary economic activity, which for the first time in ten months reached manufacturing in the contraction zone, which in turn marked an accelerated rate of decline. However, conflicting statements arrived overseasWhere Michelle Bowman (who is part of the Board of Governors) said that a cautious approach must be adopted and prefers to gradually lower the reference rate, while Lisa Cook (also a member of the Board of Governors) used more accommodating words.
The performance of the sector on the stock exchange
The real estate sector experienced a slightly positive week at European level, with the index Stoxx 600 Real Estate which recorded a +0.4% on a weekly basis, almost in line with the +0.5% of the year Stoxx Europe 600.
A better performance was achieved by Italy, where the index FTSE Italia All Share Real Estate it gained 1.6% on a weekly basis, significantly outperforming the index FTSE MIB which closed the week with a decline of 3%.
Real estate securities listed in Milan
Among the real estate companies listed on Piazza Affari, there was a week positive for Risanamento (+11%, thanks to the good performance on Friday), followed by Abitare In (+4.3%) and Next Re (+3.1%). The worse performances, however, are those of Aedes (-4.7%). Brioschi negative (-1.2%). Little moves Gabetti and IGD.
Business insights came from IGD – Immobiliare Grande Distribuzione SIIQwho presented the Industrial Plan 2025-2027. The primary objective of the new Business Plan is to inaugurate a season of growth with a return to the distribution of a continuous and sustainable dividend.
The main financial targets for 2027 are: Net Rental Income increasing on a like-for-like basis equal to +16% (compared to the figure expected at the end of 2024), Ebitda from core management at 98 million euros (organic growth equal to +16% compared to the figure expected at the end of 2024), Funds From Operations at 48 million euros (+41% compared to the 34 million expected at the end of 2024). The company intends to improve the main financial indicators while maintaining an investment grade profile, recently confirmed, and bring the Loan to Value to approximately 40% at the end of 2027.
Macroeconomic data
Various ideas on the macroeconomic front came from the United Stateswhere the mortgage applications weekly showed a 1.7% increase, even as rates on 30-year mortgages increased to 6.90%, according to the Mortgage Bankers Associations (MBA). Also in the USA, the sales of existing homes they recorded an increase of 3.4% on a monthly basis in October 2024, according to a press release from the National Association of Real Estate Agents (NAR).
In Italyin September the index of production in construction it increased by 2.2% compared to August, according to Istat. On a year-on-year basis, it recorded an increase of 3.9%. On average in the third quarter, construction production increased by 0.3% compared to the previous quarter.
Broadening our gaze, always in September production in construction decreased by 0.1% both ineuro area that in theEUaccording to Eurostat estimates. Compared to September 2023, production in the construction sector decreased by 1.6% in the euro area and by 2% in the EU.
Sector studies
In the first part of 2024, according to the Tecnocasa Group Research Office, the Milan real estate market highlights gods signs of slowdown: decrease in sales (-10.1%) compared to the same period in 2023, sales times of 81 days up from 68 days a year ago, more prudent and reflective investors. Compared to previous years, the latter purchase less to make short rents, preferring the traditional channel. Prices are still rising, +1.3%, with the central areas in slight decline and various peripheral areas, especially along the new metro line and close to the redevelopment interventions, which are revaluing significantly.
The luxury segment holds its ground even if demand is more cautious and there is a slowdown in the market, mainly due to a lack of supply of valuable properties, which is why prices have held up. The requested characteristics are confirmed (high floors, terrace, 24-hour surveillance, gym/pool, concierge) even if foreign buyers, in particular Americans and Eastern Europeans, are looking for much larger bedrooms than average.
