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Mortgages are still convenient

29 December, Avvenire

“Prices have fallen on average by 20% between 2010 and 2016.  2017 closed with a fall.  Let’s say we’ve arrived where we wanted to arrive: at these prices, many families will be able to afford to buy a house”, explains Stefano Rossini, founder of the portal MutuiSupermarket.

Do you expect the property market will recover in 2018?

The outlook for the economy seems positive. The elections represent an element of uncertainty. With more certainties, there will be more chances for a recovery of transactions, this is more likely to happen in the second part of the year, with no relevant changes in prices.

How will rates on mortgages be impacted by the end of the Quantitative Easing by the ECB?

I don’t see any challenges. Banks have left most of the uncertainties crisis behind, and liquidity is still abundant. Banks continue issuing loans, and this is essential. Certainly, rates will not drop further since we’ve reached the lowest point possible. But banks have other instruments to support new issuances. For instance, they can adopt less strict criteria. Many are evaluating the possibility to grant a mortgage for over 80% of the value of the property.

How has 2017 been for the property market?

From one side, we’ve seen the fall of subrogations, that led the market in the past to a recession. The first quarter showed a contraction of subrogations for the first time since 2013. In fact, the numbers from Banca d’Italia registered a reduction of 1.8% for the first three months of the year, and of 10% in the second quarter, as assessed by Assofin. This fall was predictable since the number of the possible applicants for subrogations has been absorbed. Many borrowers that between 2012 and 2014 chose the floating rate have passed to the fixed rate, while who applied for a mortgage at a fixed rate in 2012 made a subrogation to take advantage of the good market conditions. On MutuiSupermarket, subrogations in the first quarter of 2017 represented 60% of the total, now we’re at 40-45% and, according to the outlook, this number will drop to 20%.

Is it going better for mortgage loans?

Yes, it was a good year, even though the pace of their issuances has slowed down. The mortgage market follows the trend of transactions that, as reported by the Revenue Agency, have grown by 9% in the first quarter, by 4% in the second, and by 2% in the third.

Source: Avvenire

Translator: Cristina Ambrosi