Weak week for the real estate sector, which closed in the red in Europe but especially in Italy where the sector was among the worst on Piazza Affari. The central banks have been influencing the sector, almost all of which have brought together the monetary policy board to deal with a very delicate phase for the world economy.
Central Banking Week
The ECB, Federal Reserve and Bank of England have all decided to leave their respective reference rates unchanged, in a context dominated by energy and geopolitical uncertainty linked to the conflict in the Middle East. The ECB confirmed rates for the seventh consecutive meeting (deposit rate at 2.00%), warning that “upside risks for inflation and downside risks for growth have intensified” as a result of the conflict, while underlining that it is “in a favorable position” thanks to starting inflation close to 2%. The Fed maintained the federal funds range between 3.5% and 3.75% with an 8-4 vote, the most dissents since 1992: three members opposed the inclusion of an “easing bias” in the statement, while governor Miran called for a 25 bps cut. The Bank of England held the Bank Rate at 3.75% with a vote of 8-1, signaling the risk of second-round effects on prices and wages in a context in which CPI inflation has already reached 3.3%. The Bank of Japan also left the rate unchanged at 0.75%, but with a 6-3 vote which represents the greatest internal division of the UEDA mandate, with three members in favor of an increase in response to the growing inflationary risks linked to high energy prices.
The macro data of the week
Prices on the US real estate market are growing in February. The FHFA index, calculated on the prices declared by the properties at the time of taking out the mortgage with Fannie Mae and Freddie Mac, rose by 1.7% on an annual basis, slightly lower than the +1.8% of the previous month. The S&P Case-Shiller index, which measures the price trend in the main twenty metropolitan areas of the United States, showed an increase on an annual basis of 0.9% compared to the +1.2% of the previous month and the +1.1% expected by the consensus. However, mortgage applications in the United States are decreasing. In the week to 24 April, the index measuring the volume of mortgage loan applications recorded a decline of 1.6%, after the +7.9% recorded the previous week. The index relating to refinancing requests fell by 4.4%, while that relating to new applications rose by 1.2%.
News from the sector
With the Housing Plan, the government aims to create at least 100,000 affordable homes for the weakest categories. The measure will land on the table of the Council of Ministers with an initial budget of just under one billion. The figure is locked down (970 million to start with up to 1.1 billion could be added by drawing on cohesion funds until 2030) and is also written in black and white in the Infrastructure annex presented this week by the executive in support of the public finance document. UniCredit instead completed and provided a financing operation in favor of Panealba, a leading Italian company in the production and distribution of sweet and savory baked products. The operation is divided into a 12-year Real Estate Leasing financed by UniCredit Leasing and an ESG Linked Term Loan, lasting 7 years. The overall value of the operation amounts to 78 million euros.
The performance of the sector on the stock exchange
The real estate sector on the stock market experienced a negative week, performing worse than the pan-European Stoxx 600 Real Estate index which lost 1.9% on a weekly basis. The Italian FTSE Italia All Share Real Estate index shows a sharp decline of 4.5%, performing worse than the FTSE MIB market index which did not record significant changes (+0.02%). Among the real estate companies listed on Piazza Affari, the worst performance on a weekly basis is that of IGD (-5.15%). Also in the red are Risanamento, which slipped by 3.5%, Abitare In (-3.2%) and Aedes (-3%). Gabetti also fell (-1.6%), Next Re unchanged.
