The real estate market closed the week in negative territory, after the previous eighth week. These seven days have been interesting once again from the news coming from the monetary institutions. The statements of the Minister of Economy and Finance also had an impact, Giancarlo Giorgetti: the head of the ministry said that for the next budget, “there will be a call for contributions for everyone, not simply for the banks”, thus suggesting the project of a unexpected withdrawal on a large number of companies.
Central banks ready for new cuts
Protagonist with new announcements was the central bank of China which ordered to lower mortgage rates, for existing mortgages, before 31 October, as part of a wide-ranging policy aimed at supporting the country’s real estate market, which is suffering due to the slowdown in the economy. Inflation in the Eurozone which fell to 1.8%, below 2% for the first time since June 2021, consolidated expectations for a rate cut in October by the ECB. Also fueling the hypothesis of a new reduction in the cost of money were the declarations of President of the ECB, Christine Lagardeduring the hearing in the European Parliament: “We will not wait for everything to go to 2% to cut rates,” said the number one of the Eurotower. Across the ocean, the Chairman of the Federal Reserve, Jeorme Powellopened up to new interest rate cuts citing the good health of the American economy. “If it evolves as expected, rates will move towards a more neutral level,” said the banker, specifying that however the central bank is not on a path already determined, but will decide meeting by meeting.
The performance of the sector on the stock exchange
The real estate sector experienced a down week. The performance at a European level shows a decline in the Stoxx 600 Real Estate index of 1.64% on a weekly basis, while Italy fared worse, with the FTSE Italia All Share Real Estate index, which took home a decrease of approximately 2%.
Real estate securities listed in Milan
Among the real estate companies listed on Piazza Affari, there was a highly negative week for Aedes (-16.5%) e Dootstay (-11.4%). Down too Brioschi (-3%) e Remediation (-2%). The other players in the sector also closed lower, such as IGD, Gabetti and Abitare In which slip by around 1%.
Macroeconomic data and news from the corporate front
Week lacking in ideas from the macroeconomic front. They arrived from USA the usual numbers on mortgage applicationswhich began to decrease again in the week to 27 September, after the jumps of recent weeks. The index measuring the volume of mortgage loan applications recorded a decrease of 1.3%, after +11% in the previous week. The Mortgage Bankers Associations (MBA), indicated that rates on 30-year mortgages rose to 6.14% from 6.13% the previous week.
On the corporate side Rightmovethe FTSE 100 company that operates the UK’s largest online property portal, made headlines by rejecting an upwardly revised $8.29 billion takeover proposal from Australian property firm REA Group (controlled by Rupert) . Rightmove said its board, after considering shareholder views and considering representations from REA’s chairman and management team, concluded that the latest proposal remained “unattractive” and “continues to materially undervalue Rightmove.” .
Borgosesiaa company that operates in the field of investments in alternative assets, completed, during the first nine months of 2024, real estate sales for a total of 20.7 million euros (approximately -19% compared to 25.5 million in the same period of 2023 , strongly influenced, positively, by the disposals carried out as part of the operation that led to the purchase of the Hybrid Tower Mestre), feeling the effects of the greater impact on the overall portfolio of the assets intended for leasing.
Sector studies
According to data from the Group Research Office Tecnocasain 2023 the percentage of purchases by over 64s reached almost 10% of the total sales. This is the highest percentage recorded in recent years; in 2019, in fact, over 64s made up 9% of buyers and in subsequent years the share decreased further, reaching its minimum in 2021, falling to 7.9%. In 59% of cases, over 64s purchase their main home, 27.7% purchase as an investment, while 13.3% of purchases concern a holiday home. In many cases they buy the house in tourist locations to live in it with their children and grandchildren.
The international real estate market in 2024 is marked by profound economic uncertainties, geopolitical instability, inflation and climate change that threaten a possible economic recession and the already fragile social cohesion of today. The tenth edition of “Quo Vadis Italia?”, Real Estate Summit organized by the international law firm DLA Piper, took stock of the global scenario and outlined future prospects, with a large and prestigious range of partners: BNP Paribas Real Estate, CBRE, Colliers, Cushman & Wakefield, Dils, JLL, Savills, Urban Land Institute. Professionals and investors in the Real Estate market shared points of view and reflections on a possible recovery thanks to greater interest in investments and financing. Growth is driven by trends that are driving innovation in the sector and high performance: investments in operational real estate, which guarantee higher returns, but greater complexity and additional risks, and “Brown to Green” urban regeneration strategies. Not only that, social and demographic changes contribute to generating new ways of living: serviced apartments, student housing, residences for the elderly are increasingly attractive assets for investors, which, however, require specific management skills and a deep knowledge of legislative standards in the ESG field to seize the challenges and opportunities of a rapidly transforming real estate market.
According to the findings of Idealista real estate portal, on rental prices in Italy, it emerges that in the third quarter of 2024, rents continued to grow, albeit at a more moderate pace than in previous periods, marking an increase of 1.1%. The average rental price is now 14.3 euros/m², the highest value ever recorded by idealista. On a year-over-year basis, the increase was even more significant, with a jump of 9.8% compared to the same quarter in 2023.
