Italian Residential Snapshot | H2 2022
The Italian Residential Market Performance in 2022
- Francesca Fantuzzi
- Carlo Cocuzzo
- Claudia Solarino
The Italian Economy is now facing global headwinds
The Italian economy held up surprisingly well in 2022, ranking above other key eurozone countries (France and Germany). GDP growth posted a +0.5% in Q3 2022, mainly driven by domestic demand. Net exports on the other hand were a negative driver. Carry-over annual GDP growth now stands at +3.9%.
The Residential sector confirmed its resilience in 2022 but Q4 data showed the first downturn
In 2022 the residential sector In Italy increased by 4.7% in terms of transactions (NNT) in Italy, but Q4 showed -2.1% decrease. On the investment front, investors are looking with increasing interest towards the living capital markets sector. Looking ahead, we expect softer investments in the first half of 2023, but pockets of liquidity are likely to remain. Having said, we also see a rebound in the second half of the year as inflation pulls back and monetary policy becomes less tight.
Fall in sales will drive rental demand
In 2023 mortgage rates are expected to remain above 2021 levels, potentially accelerating the shift from home ownership to renting. Higher rental demand and long-term rental growth will drive investors’ appetite for the Build-to-Rent sector.
On the capital markets front, the living sector is gradually emerging as one of the most interesting asset class in the Italian real estate sector. Although investment volumes are growing as the sector consolidates across the country, rising interest rates and tighter monetary policy may continue to temper the investment outlook in 2023, but pockets of liquidity are likely to remain.