Italian Housing Market Survey
Roberto Sabbatini – Bank of Italy (*)
Fourth Joint EU-OECD Workshop on Business and Consumer Opinion Surveys
Brussels 12-13 October 2009
(*) Based on joint work with Leandro D’Aurizio, Raffaele Tartaglia-Polcini and Francesco Zollino
(Bank of Italy)
Outline
1. Importance of investing in information on the housing market
2. The statistical outlook in Italy
3. The Bank of Italy-Tecnoborsa new survey:
a) Main characteristics
b) The questionnaire and the main results
c) Open issues and future developments
1. Importance of investing in information on the
housing market
Developments in residential property prices are crucial in economic analysis:
1) changes in house prices affect the business cycle through their impact on
(a) households’ wealth and in turn on consumption behaviour
(b) residential investments;
2) Sharp house price fluctuations impact on financial stability (credit quality).
3) The recent global crisis suggests that financial innovation might have amplified the role of
housing in the cycle (via the impact of rise/fall in house prices on the value of collateral)
4) The functioning of the housing market affects labour mobility
Empirical analysis shows that housing market might contribute to the persistent propagation
of shocks that hit the economy. Some evidence suggests that its role has increased over time
The recent crisis confirms the importance of investing in reliable, complete and (possibly)
harmonized statistics on the housing market.
Information available in Italy (as well as in the euro area) is lacking.
This presentation focuses on a recent initiative undertaken in Italy to enhance a timely
monitoring of the housing market (others regard house price indicators)
2. The statistical outlook in Italy
In Italy information on the housing market is:
• released by many institutions/research centres (private and public);
• not systematic, not timely, not available for a few important dimensions
a) Price statistics
Official (NSI) data on property transaction prices are not available yet.
Alternative sources (all pro and cons):
• Nomisma: no breakdown in the series but limited geographical coverage
• Il Consulente immobiliare (CI): long time series (1965) and broad territorial reach,
but frequent changes in the reference sample (breakdown).
•Osservatorio del mercato immobiliare (OMI). Broad territorial coverage, but lack of
historical depth (since 2002) and data published with a delay of a few months.
All in all (Bank of Italy statistics
CI is the source that is best suited to analyzing medium-term developments. It is used
in BI (Zollino, Muzzicato and Sabbatini, 2008) to compute an index since mid-1960s
OMI is important for the wealth of information provided and territorial coverage. It is used
in BI (Cannari and Faiella, 2007) for estimating households’ wealth.
(b) Non-price information
a) Statistics on building permits are released, but only at an annual frequency and with a delay
of 1.5 years
b) Information on transactions is available (OMI), but with 3-4 months delay. Furthermore,
data are semi-annual (quarterly data only on an experimental basis)
c) Information regarding how long it takes to sell a dwelling, the percentage of discount on the
initial price and so on is not collected systematically.
(c) Qualitative (high-frequency) surveys
ISAE monthly surveys. (1) Question on the households’ intention to buy a dwelling (poor
leading properties of the answers); (2) business climate of building firms (what about
market transactions of residential dwellings?)
New initiative to fill the gap for the residential market
Early 2009 Bank of Italy and Tecnoborsa launched a new quarterly survey to collect
(timely) information on the residential housing market.
3. Bank of Italy-Tecnoborsa survey /1. General characteristics
Purpose
Qualitative data are useful to fill the informative gap for a set of variables, such as
prices, transactions and time for selling, on which quantitative statistics are either
available with a considerable lag or missing at all
Main general characteristics
a) Quarterly survey (since January 2009) that gathers opinions of real-estate agencies
on the residential market through a questionnaire (short, simple, structured).
b) Survey outsourced to an external company (Questlab Srl)
c) The data are collected in the month following the end of the calendar quarter (Jan,
Apr, July, Oct);
d) The reference quarter is the last calendar quarter (answers must refer to it); the
reference population consists of real-estate agencies (source: Istat)
d) The sampling design is stratified, with a total of 34 strata representative of 4 national
macro-areas (North-West; North-East; Centre; South and Islands).
Bank of Italy-Tecnoborsa survey / 2. The methodology
a) Collection of the data
• Initial contact by email; questionnaire filled in through the web (most used) or sent by fax
• A leading Confederation of real-estate agents (FIAIP) provided the main list of agencies to
extract the sample; strong cooperation to “contact” the agents (information, etc.)
b) Sample design (34 strata) and reference population
• 15 Italian towns with population of 250,000 or more
• 15 areas around the towns at letter (a) forming the hinterland
• 4 national macro-areas (North-West, North-East, centre, South and Island) excluding the
30 strata above.
Note: each stratum contains a minimum # of units; then, the sample size is large enough to
ensure that s.e. are acceptable; the basic # of units per stratum is proportional to the number
of transactions recorded in 2006.
Each real-estate agency in the sample is assigned a weight given by the number of firms in
the stratum cell to number of firms in the sample
c) Contacts/response rate
Around 3,500 agencies are reached; target 1,500; actual participants around 1,000 (still
relatively low response rate)
Bank of Italy-Tecnoborsa survey / 3. The questionnaire
In the first quarter of 2009 evidence of a slump in the housing market
Section 1. The outlook for transactions
(a) # of months to
sell a dwelling;
(b) unexecuted
mandate to sell and
new mandate;
(c) main reasons not
to renew a mandate;
(e) percentage of
sales financed by
mortgages and their
incidence on
transaction prices
Table 1
A1. Considering the total number of homes sold by you in the reference quarter, how many
months passed on average between a house being registered with you and its sale
(exchange of contracts)? (months)
A2. Compared with the previous quarter (October–December 2008) was the average property
selling time (number of months indicated above) in the reference quarter…?
(Much shorter, same, longer, much longer)
A3. Considering the number homes on your books still unsold at the end of the reference quarter
(January–March 2009), compared with the end of the previous quarter was that number…?
(much smaller, smaller, same, larger, much larger)
A4. Considering the number of homes newly registered with you in the reference quarter,
compared with the previous quarter was that number…?
(much smaller, smaller, same, larger, much larger)
A5. Regarding non-renewals of selling
agreements in the reference quarter,
please select the main reasons from the
list on the right? (no more than three)








A. Considering all the houses sold by
you in the reference quarter, how many
do you know were bought with a
mortgage and for what proportion of
price?
Seller thought the offers received were too low
Owners decided to wait expecting a rise in p
No offers were made because buyers thought
the price was too high
Too long since the property was put on the
market
Seller thought fees were too high
Buyer had difficulty getting a mortgage
Seller encountered unexpected problems
(seizure of goods, separation, etc.)
Other reasons (give details)
|_______| % of homes bought with a mortgage
|_______| % of price covered by mortgage
|_|
Don’t know
Section 2. Prices
(a) Price developments in
the reference quarter
(qualitative and
quantitative);
B1. (For agents that sold properties in the reference
quarter) For the main type of property sold in the
reference quarter, was the average selling price (per
sq.m.)...?
B1. (For agents that DID NOT sell properties in the
reference quarter) Within your territory, in the
reference quarter are average selling prices (per sq.m.)...?
much lower, lower, fairly stable, higher, much higher
(b) Transaction price vis-àvis offer price (percentage
of discount)
B1_1. Can you quantify the change in selling prices as a
percentage? (Please also indicate the sign of any change)
B2. Considering the main type of property sold by you in the
reference quarter, compared with the seller’s first asking
price was the selling price…?
Table 2
Lower by: more than 30% |_| 20-30% |_| 10-20%|_|
5-10% |_| less than 5% |_| Same (or higher) |_|
Background issue: how to ask for prices in quantitative terms?
y/y vs. q/q percentage changes? Intervals or number? Only quantitative,
qualitative, both? Actual price vs. perceptions (answer tend to concentrate in
classes 0, 5, 10, ..)
Section 3. Short-term perspectives
C1. As far as concerns the type of property generally sold
by you, regardless of recent trends how do you think
prices in April–June 2009 [quarter next to the
reference one] will differ from the reference quarter?
(a) Prices (next quarter);
(b) Number of mandates to
sell (next quarter);
(c) General outlook of the
residential market in the
local market (next quarter)
and the national market (next
quarter and next 2 years)
(Sharp decrease Decrease
Sharp increase)
Fairly stable
Increase
C1_1. Can you quantify this change in selling prices as a
percentage? (Please indicate sign)
C2. In April–June 2009, how do you expect the number of
properties newly registered with you to compare with
the reference quarter?
(Much smaller
Much larger)
Smaller
About the same
Larger
C3. Considering the housing market only in your area,
how will the performance in the current quarter (April–
June 2009) compare with the previous quarter?
(Worse Same Better)
Table 3
C4. How do you think the general situation in the housing
market throughout the country will develop
compared with the present?
In this quarter:
 worse  same  better
Over the next two years:  worse  same  better
Bank of Italy-Tecnoborsa survey / 4. Open issues and future
developments
Open issue
Difficulty in increasing the response rate (real estate agencies are not used to answer
questionnaire).
The process of interviewing agencies takes too long (just less than 1 month)
How to collect quantitative information? (prices and transaction)
To be assessed: informative content of the answers, considering that the survey was
launched in “exceptional times”
“Competition” from real-estate organizations/groups which carry out their own surveys
(they do not perceive yet this survey as something important for their activity)
Future developments
Ad hoc section to investigate specific issues
“Confidence indicator” (a few more observations are needed)
Table 1
(per cent of real-estate agencies; reference quarter: January–March 2009)
Main reasons for cancelling contract with agent
Lack of offers due to
“too-high asking prices”
main reason for contract
cancellation, followed
by “offers dismissed as
too low by sellers” and
“buyer’s difficulty
obtaining a mortgage”
Selling times stable at
around 7 months
Total
Memorandum
item:
Q4 2008
offers
no offers property
difficulty unexpected
received too expecting
made
on market
obtaining problems
low for
prices to rise owing to
for too
mortgage for seller
seller
high price
long
53.4
24.5
65.9
18.9
50.3
2.6
52.3
18.4
64.7
16.8
47.0
3.9
other
6.8
7.1
Property selling times
Average time between
entry on market and
actual sale
(months)
6.6
Total
Memorandum item:
Q4 2008
6.7
Change with respect to previous quarter
(per cent)
shorter
22.0
same
42.2
longer
35.9
10.8
38.6
50.6
House purchases and mortgages
Approximately 70% of
purchases financed with
mortgages (stable)
Ratio of mortgage to
house price 71%
(per cent; reference quarter: January–March 2009)
Total
Memorandum item:
Q4 2008
Percentage of purchases
financed with mortgage
Ratio of mortgage to
house price
70.4
71.0
69.1
68.6
Back
Table 2
(per cent of real-estate agencies; reference quarter: January–March 2009)
Property selling prices
Comparison with previous period
Evidence of more frequent
reductions in prices
(balance 59.9 compared to
-54.8)
...also with respect to the
seller’s asking price
(average reduction increase)
Prices 11.8% below the
seller’s asking price
(compared with 9.5%)
Sign that prices might
gradually decrease in the
next months.
decreasing
stable
increasing
58.6
69.3
58.6
59.1
40.6
28.9
40.2
37.1
0.8
1.8
1.2
3.8
70.4
54.4
28.5
43.8
1.1
1.7
69.8
28.9
1.3
57.8
40.7
1.6
61.4
37.1
1.5
57.6
39.6
2.8
By geographical area
North-West
North-East
Centre
South and Islands
By resident population
Urban areas (over 250,000 inhabitants)
Non-urban areas (under 250,000 inhabitants)
Metropolitan areas (over 500,000
inhabitants)
Non-metropolitan areas (under 500,000
inhabitants)
Total
Memorandum item:
Q4 2008
Difference between selling price and seller’s first asking price (1)
Total
Memorandum item:
Q4 2008
same or
higher
less than
5%
lower
5% 10%
lower
10% 20%
lower
20% 30%
lower
more
average
than 30%
reduction
lower
3.7
8.9
36.1
40.6
9.6
1.1
11.8
6.1
14.2
44.6
30.5
4.0
0.6
9.5
Back
Table 3
(per cent of real-estate agencies; reference quarter: January–March 2009)
Outlook for the housing market
Conditions on real-estate agent's
market in current quarter (AprilJune 2009)
Total (5)
Memorandum
item
Q4 2008
poor
27.7
normal
51.5
good
20.8
76.6
18.1
5.3
Expected number of newly
registered properties in current
quarter (April-June 2009)
compared with reference quarter
lower
same
higher
16.3
55.6
28.1
19.8
45.3
Expected level of prices in
current quarter (April-June
2009) compared with reference
quarter (2)
lower
same
higher
47.6
49.7
2.7
35.0
65.0
0.7
34.3
General situation of the housing market in Italy
Outlook for current quarter
compared with reference quarter
Total
Memorandum item:
Q4 2008
Outlook for next two years
compared with reference quarter
worse
same
better
worse
same
better
32.4
56.3
11.4
12.4
22.0
65.6
60.8
34.6
4.6
35.0
19.8
45.2
Estate agents are becoming lest pessimistic about the short-term outlook for the
housing market, both locally and nationally.
Their medium-term expectations for the market at national level show some
improvement on the previous survey.
Back