The European real estate sector moved in one of the most important weeks of the year for the financial markets, marked by the meeting of the European Central Bank and the wait for the decisions of the Federal Reserve scheduled for next week. The ECB’s choice to increase interest rates by 25 basis points, bringing the deposit rate to 2.25%, has brought investors’ attention back to one of the sectors most sensitive to the trend in the cost of money, in a context in which the market continues to evaluate the implications of a monetary policy still marked by prudence on the inflationary front.
The performance of the sector on the stock exchange
The real estate sector in the Milanese square closed the eighth in positive territory with the FTSE Italia All Share Real Estate index rising by 1.4%. The sector also performed well, at a European level, with the Stoxx 600 Real Estate index gaining around 1%.
Rates and markets drive divergent trends
On the European markets, the main real estate groups showed differentiated performances. In Germany, Vonovia (+1.7%) and LEG Immobilien (+3.4%) showed a positive trend, benefiting from a partial recovery of the listed real estate sector after recent pressures related to refinancing costs. Investors, however, remain focused on the impact of still high interest rates on the valuation of residential assets and the sustainability of debt in the medium term. More exposed to the commercial and office component, Aroundtown (+3.9%) followed a similar trend, reflecting a still high sensitivity to bond yields and liquidity conditions, despite a context of moderate rebound in the sector.
In France, Covivio (+1.9%) closed on the rise, with a performance supported by the office, residential and hospitality sectors, while investors’ attention remains high on rents and debt sustainability in a context of still high rates.
In Italy, IGD (+2%) recorded an increase, in line with the recovery of the European real estate retail sector. Brioschi (-0.3%) showed substantial stability with slight weakness, reflecting the greater volatility typical of stocks with smaller capitalization and more sensitive to domestic sentiment. Next Re SIIQ also remained influenced by rate expectations and the perception of risk in the SIIQ sector. Weaker performance for AbitaIn (-4.2%) after an update on the performance of the first half of 2026, which weighed on the stock.
The macro data of the week
Mortgage applications are rebounding in the United States. In the week to 5 June, the index measuring the volume of mortgage loan applications recorded an increase of 10.8%, after the 2.5% decline recorded the previous week. The index relating to refinancing requests increased by 15.3%, while that relating to new applications rose by 7.3%. The Mortgage Bankers Associations (MBA), indicating that 30-year mortgage rates increased to 6.60% from 6.57% previously.
Sector studies
The desire to buy a house is always alive, the agencies of the Tecnocasa Group confirm this. The Italian real estate market continues to grow and closes the first three months of 2026 with an increase in volumes of 4.4% compared to the same period last year. According to data released by the Revenue Agency, 179,654 homes were exchanged.
Once again, affordable mortgages have given the market a boost. The dynamics is similar for both capital and non-capital municipalities. Focusing on the large cities, we note that the most significant increase was achieved by Turin (+9.2%), followed by Genoa (+8.7%) and Bari (+8.4%). Milan did well (+7.1%). The only negative is Florence (-2.9%).
Sales of new buildings report a significant increase thanks also to the support of green mortgages and the growing interest in energy saving (+14.6%).
It is interesting to note that the cities that recorded the most favorable results are Turin and Genoa, two places where prices are still accessible. The real estate market of the Piedmontese capital has become increasingly attractive in recent times thanks to the strengthening of the university offer and also to the proximity to the Lombardy capital. Genoa, the city that over the years has suffered due to an outdated real estate market that has penalized the growth of values, is today considered by investors for the future Third Pass project and for the possibility of purchasing a second home, decidedly less expensive than the tourist resorts of its province. The current geopolitical context and the possible future increase in interest rates call for a prudent attitude for the coming months.
