February 2011 - Gruppo Banca Carige

House prices in ItalyOver years house prices in Italy show a more stable trend in comparison to other European countriesSince the late 90’s, property units on the Italian propertymarkets have increased constantly without anysignificant volatility.Since 2004 there have been some signs ofdeceleration in the dynamic of prices per square meter.According to the ECB, 2009 saw a slight decrease inresidential property prices (-0.5%).Europe: Nominal house prices yoy growth rates(source: EMF)The hypothesis of a fall in prices for residential propertyunits is improbable according to the majority of operatorsin the sector for the following reasons:Firstly, although there has been a significant increase inproperty values in Italy since 1997, it is among thelowest in the international context and this wouldseem to exclude the existence of prices artificially inflatedby speculation;Secondly there is no excess of supply over demand inItaly partly because of the scarcity of public sector socialhousing;% Change in Housing PricesEurope: Nominal house price index(source: EMF)Thirdly the ANCE (nationalassociation of propertybuilders) has underlined thatthere has been an increase inrefurbishment work inrecent years, a circumstancewhich confirms the need tocapitalise on the existingsupply;Low interest rates aresupportive of mortgageborrowing and housepurchases.Last 10 years (%)UK 107.23Spain 105.47Sweden 100.37Italy 77.36France 74.66Greece 67.42Denmark 64.83Netherlands 38.16Switzerland 35.82Sources: Global Property Guide, EMFGRUPPO CARIGE 18