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Prices for dated properties continue decreasing
11 January, Milano Finanza
The residential market is going at two different speeds concerning the price trend. While prices for new construction are increasing, the remainder of the property market is losing value.
In the third quarter of 2018, the Ipab index, which monitors the prices of the houses bought by families for living or investment purposes, shows a 0,8% reduction if compared to the previous quarter (it was -0.4% in the second quarter of 2018) as well as from the same period of 2017. As reported by Istat, the negative trend of the Ipab index concerns only existing houses which decreased by 1.3% (it was -0.8% in the previous quarter). On the contrary, prices for new houses went from +1.2% in the second quarter of 2018 to +1.4% in the third quarter. This trend combines with the consistent growth of transactions, as these increased by 6.7% in the third quarter of 2018 as registered by Omi.
In general, the decrease in the Ibap index is due to the prices of dated properties which decreased by 1%. Prices for new houses have also reduced from the second quarter, although in a more moderate way (-0.2%).
Property prices in the first three quarters of 2018 have decreased by 0.6% from 2017, resulting from the negative performance of existing houses (representing over 80% of the total), which fell by 1%, and the positive performance of new houses, which grew by 1.2%. In comparison with the average values registered in 2010, the first year for which is the Ipab series are available, in the third quarter of 2018 prices decreased by 16.7% exclusively due to dated properties, whose prices dropped by 22.9%, while prices for new houses had generally increased, even though slightly (+0.2%). The rate of change reported by Ipab for 2018 is negative and equal to -0.5%.
Source: Milano Finanza
Translator: Cristina Ambrosi