The real estate sector closes the week continuing the rally of the last eighth with the central banks which continue to attract investors’ attention, since an expansionary policy favors the mortgage market and therefore also the Real Estate sector.
Euphoria on interest rates assists the sector
The data on the American labor marketreleased in Friday’s session, which has attracted investors’ attention throughout the week, has shown a trend lower than expectedencouraging the hypothesis of the Fed rate cut at the September 18 meeting. After the publication of the August employment report, traders are banking on an interest rate cut of 50 basis points from the U.S. central bank: traders now give a 55% chance of a 50-point cut, versus a 45% chance of a 25-basis-point cut.
At the same time, accelerate mortgage applications in the United Statesin the week ending August 30. The index measuring the volume of mortgage applications recorded a increase of 1.6%, after the previous week’s +0.5%. The index of refinancing requests fell by 0.3%, while the index of new applications recorded a sharp increase of 3.3%. According to the Mortgage Bankers Associations (MBA), the 30-year mortgage rates fell marginally to 6.43% from 6.44% the previous week.
In the United Kingdomaccording to the Halifax report i Home prices to peak by late 2022adding signs of renewed momentum in the housing market after the recent drop in interest rates. In particular, the costs saw a 4.3% increase in August, the biggest annual increase since November 2022, while on the month they saw a timid +0.3%. Halifax linked the increase in activity in the housing market to the Bank of England’s decision to cut interest rates last month, taking them to 5% from a 16-year high of 5.25%, the first reduction since March 2020.
Real estate, a sector in turmoil
According to the monthly report of theIdealista Research Officein August, the average rental cost in Italy it recorded a slight decrease of 0.1%, keeping the average price stable at 14.2 euros per square meter compared to July. On an annual basis, prices increased by 8.8%.
The analysis of the sales carried out through the Tecnocasa Group networks in 2023 highlighted that the average age of buyers in Italy it stands at 43.7 years old, up from 2022 when it stopped at 42.7 years. Buyers under 34 make up the most active age group on the Italian market, with a share that is however down from 2022 when it reached 31.2%.
On the corporate front, the REA group owned by Rupert Murdoch has said that is evaluating a purchase offer for the portal British Real Estate Rightmove with the goal of creating a global digital real estate company.
The performance of the sector on the stock exchange
The real estate sector has experienced another uncertain week at European level, where Stoxx 600 Real Estate Index which closed with a 2.8% drop on a weekly basis. A better performance was achieved, however, by Italy, where FTSE Italia All Share Real Estate Index brought home a 4.4% increase, also outperforming the FTSE MIB market index which lost 1.8%.
Who goes up and who goes down
Among the real estate companies listed on Pizza Affari and making up the sector index, the best performance is that of IGD which jumps by more than 13 percentage points. Among the worst drops, however, Brioschi which yields about 3%, followed by Next Re and Restoration which slip by more than 2%.
