A week of strong gains for the real estate sector comes to an end with the attention of investors still turned to the central banks: the market is betting on a more decisive easing of monetary policy by the ECBto support the Eurozone economy after worsening manufacturing and services activity in November. An expansionary policy favors the mortgage market and therefore also the Real Estate sector. On the other side of the ocean, the president of Federal ReserveJerome Powell said the central bank “can afford to be a little more cautious” with rate cuts as it shifts policy toward a more neutral stance, noting that downside risks to the labor market appear to have receded. reduced and recent inflation readings have been a little higher than expected.
The performance of the sector on the stock exchange
The real estate sector experienced a week of strong gains in the Milanese market. Same fate for the sector, at a European level, which shows an increase in the Stoxx 600 Real Estate index of 2.7%. In Italy, the FTSE Italia All Share Real Estate index achieved an increase of approximately 5.3%.
Real estate securities listed in Milan
Among the real estate companies listed on Piazza Affari, it is the stock that wins the prize Gabetti which jumps 26%. The company, listed on the Euronext Milan market, which provides services for the entire real estate system, was the subject of a research study published by EnVent Italia SIM, an Investment Banking Firm dedicated to the mid-market which carries out corporate studies for listed issuers: EnVent has assigned to Gabetti a target price of 1.50 euros per share, with an upside of +242% on the current share price and a rating of Outperform. Follows closely Aedes with an increase of 13.9%. In rallying too IGD And Remediation which bring home, respectively, +4% and +9%. Furthermore, the actions are positive Living IN +1.8%. On the downside, however, the Brioschi -2% and the Next RE -1.8%.
Macroeconomic data
In Great Britainhome prices rise at fastest pace since 2022. According to data from Nationwidein November, i house prices in the UK recorded the fastest year-on-year increase since November 2022, marking a sign of the property sector’s resilience in the face of higher financing costs. Annual prices rose 3.7% in November and 1.2% month over month, Nationwide said. Both increases, annual and monthly, were higher than economists’ forecasts. Bank of England data last week showed the highest number of mortgage approvals for house purchases since August 2022. According to Halifaxthe UK property market saw an acceleration in November, with house prices rising 1.3% compared to the previous month. This growth exceeded the forecasts of economists, who had estimated an increase of 0.2%, marking the highest monthly increase of the year.
Give it to him USA the usual numbers have arrived on mortgage applications which, in the week to 29 November, showed an increase of 2.8%, after the +6.3% of the previous week. The index relating to refinancing requests fell by 0.6%, while that relating to new applications increased by 5.6%. There Mortgage Bankers Associations (MBA), indicated that 30-year mortgage rates decreased to 6.69% from 6.86% previously.
Sector studies
The Italian real estate market, after a period of slowdown, shows signs of recoverywith a +1.2% of sales in the second quarter of 2024. A figure, according to what was found by NETRAISan SME born in 2020, which confirms how fundamental the home remains for Italians (3 out of 4 today live in home ownership). Yet, purchasing a property remains a difficult step for many families (only 980,000 are able to afford it, out of 3 million who would like to buy a house): inflation, low incomes and the gap between supply and demand slow down purchases. Also for this reason, today, people are looking for smaller houses than in the past: interest in three-room apartments is growing (44%) and interest in new buildings is decreasing (-8.5%) in favor of renovated buildings, while post-pandemic houses they have become multifunctional, not only for rest, but also for work, leisure and socializing.
Also the 3rd Observatory on the real estate market 2024 by Nomismadetects the first signs of recovery for the sector, after the period of obscurity attributable to the effects of the progressive drying up of the credit channel. According to Nomisma, which analyzed the performance of the 13 main Italian markets, the possibility of a recovery in demand fundamentally depends on two factors: on the one hand, the stability of family incomes, for which, however, a “slight deterioration” cannot yet be ruled out ” of the labor market, and on the other the restoration of less prudent and selective conditions for access to credit.
The Research Office Tecnocasa analyzed the data released by the Revenue Agency for the first nine months of 2024: 502,301 homes were sold in Italy, with a decrease of 1.1% compared to the same period last year. However, if we look at the third quarter of 2024, the situation appears to be improving with a 2.7% increase in sales at a national level. The decline of the Italian real estate market is therefore slowing down, thanks to the fall in interest rates which has given new impetus to demand, as also demonstrated by the fact that in the third quarter of 2024, sales financed with mortgages increased, now equal to 44.1% of total.
With major central banks lowering interest rates, the prolonged and painful downturn in commercial real estate is finally coming to an end, at least in some segments. Experts underline this PIMCO of the sector, who in a recent round table underlined that the recovery is likely to be slow and uneven and it will be necessary to focus strategically on specific sectors and geographical areas as well as carefully evaluate whether to take positions in debt or equity participations in the various opportunities .
