One more Upward week for the real estate marketwith central banks continuing to capture investors’ attention, as an expansionary policy favors the mortgage market and therefore also the real estate sector.
After the interest rate cut operated by the European Central Banklast week, another breath of fresh air came from the Federal Reservewho announced a maxi-reduction at the cost of moneyin the United States, reinforcing expectations of a soft landing for the American economy. It was the first cut in four years. The chairman of the central bank, Jerome Powell, during the usual post-meeting press conference, opened to the possibility of further reduction the cost of money of 0.5% by the end of the year. Also this week, as expected, the Bank of England left the cost of money at 5% and Norges Bank kept its benchmark interest rate unchanged at 4.50%, a 16-year high. The Bank of Japanin the last session of the eighth, left the cost of money remains unchangedas expected.
The performance of the sector on the stock exchange
The real estate sector has also seen an increase this week. At a European level, The Stoxx 600 Real Estate Index rose 0.5% on a weekly basis, even though the Fed’s decision was expected by the markets, but insiders were not sure about the size of the cut, 25 basis points or 50. Positive performance also in Italy, where FTSE Italia All Share Real Estate Index brought home a increase of approximately 0.5%although lower than the FTSE MIB index which closed the week with a rise of 1.5%.
Real estate securities listed in Milan
Among the real estate companies listed on Piazza Affari, a positive week was recorded for Aedes (+10%), followed by Restoration (+1.33%) and IGD (+0.59%). The worst performances, however, are those of Brioschi (-3.8%) and Cabinets (-1.4%).
Macroeconomic data
A week full of ideas from the macroeconomic front. I new construction sites started in the United States they recorded a 9.6% increase in August after collapsing a month earlier.
Mortgage applications in the United States they recorded a increase of 14.2% over the past week, while rates on 30-year mortgages fell to 6.15% from 6.26% the previous week.
US Real Estate Confidence Improvingsummarized by theNAHB indexwhich breaks a streak of four consecutive monthly declines.
Existing Home Sales in the United States recorded a decrease of 2.5%, according to the National Association of Realtors (NAR), after the +1.5% reported in July. 3.86 million homes were sold compared to 3.96 million in July and against the 3.92 million units expected by analysts.
House prices accelerate
According to preliminary estimates of theISTATpublished this week, the house price index (IPAB)) purchased by families for residential purposes or for investment grew by 3.2% compared to the previous quarter and 2.9% compared to the same period in 2023 (it was +1.6% in the first quarter of 2024). The largest contribution is given by the prices of new homes up 8.1% on an annual basis (a sharp acceleration compared to the +5.3% of the previous quarter) and, to a lesser extent, to those of existing ones which increased by 1.9% (strengthening compared to the +0.8% of the first quarter). At a territorial level, the annual growth of house prices is widespread in all geographical areas: the highest growth is recorded in the South and the Islands with a +3.9%, driven by the prices of new homes which recorded an increase of 9.5%. They are followed by the North-East (from +1.6% to +3.7%), the North-West (from +1.9% to +2.5%) and the Centre (from +0.6% to +2.2%).
