House price increases in Italy
House price increases in Italy/ Photo by Louise Krause on Unsplash

In spite of the COVID-19 pandemic, Italy saw record increases in house prices in 2020. According to the regular Istat housing index (from the Italian National Institute of Statistics), values show an increase of 1.9% over the past year. This is the highest average annual growth since the Istat House Price Index (known as Ipab) has been available.

House prices in Italy 2020

As Istat points out, this trend of property price increases in Italy occurs against a backdrop of a 7.7% decrease in residential property sales compared to 2019, confirming how the trend in house prices is only partly affected by movements in demand. The increase is attributable to both new and pre-owned property prices and is driven by the north, with the south and islands seeing a return to rising prices while in the central regions of Italy, prices remain more or less stable.

The increase in prices of new homes are up 2.1%, and those of pre-owned homes (which account for more than 80% of the index), have risen 1.9% in Italy. Compared to the average of 2010, the first year the Ipab index was published, house prices decreased by 15.0% in 2020 (-21.6% for pre-owned houses, +3.6% for new houses). The acquired rate of change for house prices in 2021 in Italy published by Istat is -0.3% (-0.6% for pre-owned dwellings and +0.8% for new dwellings).

Values in the fourth quarter of the year

According to preliminary estimates, in the 4th quarter of 2020, the house price index by Istat (including properties purchased for housing or investment purposes) increased by 0.3% compared to the previous quarter and by 1.6% compared to the same period in 2019. The trend increase is due to both the prices of new houses in Italy, which increased by 1.7%, slowing down compared to the previous quarter (when the change was +3.0%), and the prices of pre-owned properties, which increase by 1.4%, accelerating compared to Q3 2020 (it was +0.7%). These trends are occurring against a backdrop of lively growth in volumes of buying and selling (+8.8% is the year-on-year increase recorded by the Agenzia delle Entrate's Real Estate Market Observatory for the residential sector for Q4 2020, after +3.0% in the previous quarter).

The graph below shows house price trends in Italy from the 1st quarter of 2015 to 4th quarter of 2020

House price trends from the 1st quarter of 2015 to 4th quarter of 2020
House price trends from the 1st quarter of 2015 to 4th quarter of 2020