Italian Residential Property Market Stays Stable

19 March 2012 - Novrealty

A new Italian government headed by Mario Monti, a respected economist and former European Commissioner, has replaced the government of Silvio Berlusconi, who had dominated Italian politics for 17 years. Berlusconi's coalition was weakened by corruption allegations and sex scandals, and under the pressure of enormous borrowing costs and the euro crisis, he resigned on November 12, after losing a crucial vote in parliament.

Before Berlusconi resigned, Italy's deficit was only 4.6% of GDP in 2010, down from last year's 5.4% deficit. Italy's senate approved the 2012 austerity plan which cuts the deficit to 1.4% of GDP in 2012 and will actually balance the budget in 2013, according to Economy Minister Giulio Tremonti.

With a new Government in power will it boost confidence and help Italy's housing market?

According to the Italian property news portal, the national average prices on residential assets in Italy in 2011 held steady, lingering on the levels recorded in 2007. The national average price in H2 2011, after a slight increase in H1, has fallen by 0.03% in the second part of the year. The average price equals Euro 1,583 per square metre. Moreover residential transactions have recorded a 1.9% decrease in 2011, involving the sales of 1,321,229 properties.

Real estate agents are optimistic, however, that things are moving in the right direction, expecting more sales mandates over the coming months, according to a Bank of Italy survey in October 2011.