The drop in interest rates on mortgages marks an important turning point for Italian families and for those intending to purchase a property. After months of increases, the most recent data show a reversal of trend which favors access to credit, with positive implications also for businesses.
At the same time, accessibility to the real estate market varies greatly from city to city, revealing significant regional differences.
But what are the implications of these dynamics? Is it really the right time to buy a house or take out a mortgage?
Let’s find out!
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Mortgage rates at lows from 2022: an opportunity for families
In September 2023, the average rate on new mortgages issued is dropped to 3.82%the lowest level recorded since December 2022. This decline represents a significant turnaround from the peak of 4.92% in November 2023.
The decline, although gradual, entails tangible savings for those who have chosen to take out a mortgage: for a standard loan of 125,000 euros over 25 years, we are talking about approximately 77.5 euros less per monthor an annual saving of 930 euros.
The decline also affects loans to businesses, with average rates falling to 4.9%, the lowest since May 2023. This trend could further consolidate following the decisions of the ECB, which could continue with cuts to reference rates in the coming weeks .
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Codacons and the drop in rates: a relief for families
Codacons welcomed the drop in mortgage rates, calling it a “good news” for Italian families, in particular for those who have taken out a loan for the purchase of their first home.
The consumer association highlights how the downward trend in rates, which fell by 1.1% in just ten months, represents significant savings for borrowers. In practical terms, this translates into greater economic sustainability for families, making it easier to pay the monthly installments.
Furthermore, Codacons highlighted how the drop in rates is a positive signal for the entire real estate sector, helping to stimulate access to credit and relaunch the market.
However, the association invites you to carefully monitor the evolution of the ECB’s decisions, which could further impact the costs of financing.
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How much it costs to buy a house in Italy: data city by city
In addition to interest rates, the number of years of salary needed to buy a house also varies significantly in Italy. Milan confirms itself as the most expensive city, requiring on average 12.5 years of income to purchase a property at the average price of 4,285 euros/m². They follow Romewith 9 annuities, e Florencewith 8.8.
The least expensive cities, such as Palermo and Genoa, require around 3.3 years, thanks to average prices of 1,127 and 1,143 euros/m² respectively. This disparity highlights the structural differences of the Italian real estate market, with cities like Milan benefiting from urban redevelopment projects, capable of pushing prices even in peripheral areas.
In 2007, the year in which real estate prices reached their peak, Rome was the most expensive city, with 14.8 years required to buy a house, followed by Milan with 14. Since then, Milan has surpassed the capital in terms of relative cost, thanks to investments in infrastructure and redevelopment.
This trend has been confirmed over the years, positioning the Lombardy capital as a leader in the national real estate market.
