From the beginning of the crisis of 2008-2009 until today, the real estate market has gone through a series of cycles that can be understood pretty well by looking at the trend in housing prices. The graph highlights the different dynamics of housing prices between Italy and the average of the countries in the EU.
In 2011, two years after the crisis of 2008-2009, the level of the price index was much higher in Italy than the European average. Italy experienced a significant increase in prices in the past, specifically in the first half of the 2000s, compared to the European average.
In response to the shock caused by the two-year crisis, the reaction of the property market in Italy is profoundly different from the European average. While at the end of these two years, the average price in the EU fell by 5.2%, in Italy it increased by 3.8%. In most European countries, the adjustment to the crisis was reflected in the prices and in the number of sales. In contrast, in Italy the prices continued to rise, but the number of transactions fell. For this reason, it is concluded that the adjustment to the crisis in Italy was reflected in the number of sales and not in the prices.
1st quarter of 2010 - 1st quarter of 2012
What happened during this period was relatively similar in Italy and in Europe in terms of price changes. In Italy, the change was positive but only slightly (+0.4%), while the EU average still showed a slight negative variation (-0.3%) in that same period.
2012 - 2013
These really were the decisive years. In these two years, the GDP in Italy fell considerably and at the same time there was an increase in the debt and the first signs of the banking crisis began to appear. Taxes on real estate assets also increased and, in addition, there was a drop in sales, accompanied by a drop in housing prices. The variation in the European average was -1.2%, while in Italy it reached -10.7%.
2014 - 2017
During this period there was a recovery in prices throughout the European Union, while in Italy the decline in prices began to slow down. Between the first quarter of 2014 and the third quarter of 2017, the index of the EU average increased by 14.8%, while in Italy it decreased by 5.1%. Thanks to this drop in prices, there began to be a recovery in the number of purchases. Between 2014 and 2016, the number of homes sold rose approximately 27%, and in 2017 this trend continued.
According to analysis by the Agenzia delle Entrate (the Italian tax agency), the crisis in Italy has made its effects felt in real property prices, but a bit late because of the second crisis in 2012, which was much more acute in Italy than in the rest of Europe, and marked a more pronounced fall in GDP compared to other countries.