House prices (provisional)

The House Price Index (HPI) measures the evolution of market prices of all residential properties that are purchased by households (flats, detached houses, terraced houses, etc.), both new and existing, independently if bought for own-occupancy or as an investment.

According to preliminary estimates, in the second quarter of 2020 the HPI (see Italian IPAB) increased by 3.1% compared with the previous quarter and by 3.4% compared with the same quarter of the previous year (it was +1.7% in the first quarter).

The increase on annual basis of HPI, the largest since the IPAB time series is available, was due to either the prices of new dwellings (+2.7%) or those of existing dwellings (+3.7%), both of them accelerating in comparison with the previous quarter (they were +1.0% and +1.9% respectively).

The increase of HPI occured in a context of sharp contraction in sales volumes (it was -27.2% the rate of change on annual basis registered for the residential sector in the second quarter of 2020 by the Observatory of Real Estate Market belonging to Tax Office) due to the measures adopted to contain the spread of Covid-19 which drastically limited the possibility of signing notarial deeds, expecially in April.

The strong growth in prices of residential property consolidated the trend started in the second half of 2019 and it was referred to contracts signed between April and June but whose conditions were mostly established before the lockdown. The drastic drop in volumes of sales involved the first part of the quarter and it was largely reabsorbed in June, without prefiguring a generalized and persistent decline of the demand such as to influence the short term evolution of prices.

The increase on quarterly basis in the HPI (+3.1%) was due both to the prices of new dwellings and to those of existing dwellings, that increased by 2.0% and by +3.3% respectively.

The increase of HPI on annual basis involved all geographical areas. In North-West and North-East it showed wide increases (+5.5% and +4.1% respectively) followed by South and Islands (+2.3%), whereas Center recorded a lower growth rate (+0.9%).