The one that just ended was one interim week for the real estate sector on the stock exchangeawaiting the third quarter results of the giants of the sector, to find out how the business has performed in recent months and to have new forecasts for 2025. In the absence of indications from the quarterly reports, investors looked at the prospects of interest rates: the probability of a cut by the Fed next week remains very high, while for the ECB a 25bp reduction in December is virtually certain.
However, higher-than-expected growth in Europe and also robust in the USA, combined with inflation rising again, have pushed markets to bet on the fact that the Fed and the ECB they will not be in a hurry to cut the cost of borrowing. In recent days, ECB President Christine Lagarde said in an interview that the objective of 2% inflation is on the horizon but that price dynamics are not entirely under control.
The performance of the sector on the stock exchange
The real estate sector experienced a negative week at European level, with the index Stoxx 600 Real Estate which recorded a -3.8% on a weekly basis, worse than the -2.9% of the Stoxx Europe 600.
A slightly better performance was achieved by Italy, where the index FTSE Italia All Share Real Estate it lost 2.2% on a weekly basis, however under-performing the FTSE MIB index which closed the week with a decrease of 1.5%.
Real estate securities listed in Milan
Among the real estate companies listed on Piazza Affari, there was a week positive for Next Re (+1.2%). Little move Living In. Le worse performances, however, are those of Restoration (-9%). Negative Aedes (-3.5%), Gabetti (-1.9%), Brioschi (-1.6%). Smaller drops for IGD (-1.2%).
While the quarterly reporting season has yet to come into full swing, Remediation closed i first nine months of 2024 with a consolidated net loss of 27.5 million euros, compared to the positive net result of 16.7 million euros as of 30 September 2023 (which also benefited from the positive effects of the Project Starfighter operation amounting to approximately 30 million euros )
Macroeconomic data
The biggest insights come from the United States this week. First of all, the mortgage applications were down slightly, following a big drop the previous week, with 30-year mortgage rates rising to 6.73%, according to the Mortgage Bankers Associations (MBA).
From the point of view of house pricesthe Federal Housing Finance Agency index marked +0.3% month-on-month and +4.2% year-on-year for August 2024, while the S&P Case-Shiller indicator recorded +5.2% year-on-year for the same month.
They accelerated the Home sales in progress in September, according to data from the Association of Real Estate Operators (NAR), with an increase of 7.4% on a monthly basis.
Sector studies
In recent days, the 2024 Confindustria Assoimmobiliare public meeting was held, during which the survey was presented: “The recognized value. Italians and the perception of real estate investments in big cities”, created in collaboration with the SWG Research Institute. 67% of the population considers initiatives aimed at recovery of degraded neighborhoods49% think it is essential to convert abandoned industrial buildings and 33% consider the construction of university student residences essential. In particular, looking at large cities, the analysis finds that in Milan the social impact of brick interventions is linked above all to the ability to build spaces with a strong public value and widely accessible. In this context, the need to create safe places for the inhabitants and citizens who frequent them is also fundamental. In the Milanese capital, 72% of the population judges this type of investment favorably compared to a national average of 63%. The large initiatives in the real estate sector are then seen as a win-win process for all the actors involved: from financial investors, to home buyers, up to the inhabitants of the neighborhoods.
According to an analysis carried out by the Tecnocasa Group Research Office based on Revenue Agency data, the second quarter of 2024 describes a positive scenario for business real estatewith sales increasing in all sectors although with lower growth rates than in the first quarter. It was the warehouses that recorded the strongest increase (+9.9%), followed by the shops which closed the quarter with an increase of 5.5%. As for offices whose transactions increased by 2.6%.
The BRICK Observatory created by the Berry company has calculated that in the first nine months of 2024 the number of real estate auctions published in Italy continued to decrease, while the average value of the starting prices stabilized at around 170,000 euros, with average variations of 1%. The large cities show different trends: in Rome the number of auctions remained stable compared to the same period in 2023, while the average starting auction prices fell by 21% (from 316,000 to 250,000 euros). In Milan, however, auctions increased by over 52%, with a 12% increase in the average starting auction price (from 221,000 to 250,000 euros).
