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Houses towards the recovery
Mortgages are increasing: +17%
The real estate market is in good shape. Especially for what concerns the transactions. In the first quarter of the year, the houses sold have been 122 thousand, with a growth of 8.6% compared to the same period of the previous year. In the first eight Italian cities, the Revenue Agency reports, the increase in the property sale transactions has reached the 10%, with 22,170 transactions. The best performance was registered by Florence (+16.5%), followed by Genoa (+15%), Milan (+13.8%) and Rome (+10.2%).
This positive trend in the transactions is counterbalanced though by the languishing prices. According to the index elaborated by Idealista.it , the price of second-hand houses has registered a fall of 1.3% in the first three months of the years, reaching 1,869 euro per square metre. According to Vincenzo De Tommaso, from the research office of the internet portal, “the house is again in the interests of the buyers, but the price trend isn’t diverting. The reason is soon explained: on one side a rather dated real estate offer, on the other side a heavy taxation that forces the landlords to sell out rather than paying any type of tax on a property that doesn’t bring much income. This is why, except for Florence (+1.1%) and Bologna (+0.5%), all the other big metropolitan markets have registered a decrease in the average value, even if smaller than that of minor cities. A characteristic common to Milan (-2.4%), Rome (-1.2%) and Naples (-0.9%).
Between buyers and sellers, there are the real estate agencies, but more importantly there are the banks. The increase in property sales – undeniable fact – is dragged from the bottom by the low rates that make easier to get funds through a mortgage loan. In the first three months of 2017, the applications for loans to buy a house have increased by 17%, whereas the amounts granted have shown an even higher increase, equal to 21%. At the same time, the value of the properties object of the applications has sharply diminished stopping slightly above 224,000 euro, explained the mortgage watchdog of Facile.it and Mutui.it . According to the analysis, if the average value of the property decreases, the value of the amounts requested increases instead, even if only by a little. In the first quarter of 2017, the amount that the applicants tried to obtain from the banks has been around 132,500 euro, 5% more than 2016. Also, the grants have grown following the same trend (+4%), reaching approximately 123,100 euro. In the period taken into consideration, 78% of the applications have been indexed with fixed rate and the 18.5% with variable rate. The duration of loans has stayed practically unchanged (21 years), as well as the age of the applicant (40 years old).
The watchdog for MutuiOnline.it has instead highlighted that last May the average rate on new mortgages at 20 years with fixed rate was set at 2.34%, whereas for the same duration the variable rate has stayed at 1.07%. Stability is the right word because, generally speaking, the rate curve is maintaining the same inclination, with minimal ups and downs on a monthly basis. Considering the high demand, the competition among banks is an advantage for the applicant. For example, if we consider an employee worker aged 45 years with a monthly net income of 2 thousand euro intending to buy a property in Milan of a value of 300 thousand euro and applying for a 20 years loan of 200 thousand euro, he will have a wide choice. From Intesa SanPaolo (mortgage Domus) to Ubi with Iw Bank, Mps with Widiba, BancoBpm with We-Bank (mortgage Facile), till Hello Bank of Bnl-Bnp Paribas (mortgage Hello Home), the differences are minimal. Besides, it’s always possible to negotiate in the branch some other benefit.