House prices in Italy were flat in the last quarter of 2022 from the previous three months and posted the smallest annual rise since mid-2021, data showed on Monday, reflecting a slowing economy and rising mortgage rates.
The rate-sensitive real estate sector has recently seen a global decline as central banks have rushed to tighten their monetary policy to fight soaring inflation after a decade of cheap money.
National statistics bureau ISTAT's house price index (HPI) posted positive quarter-on-quarter readings for seven straight quarters before declining by 1.1% in the third quarter of last year, followed by the stagnant reading in the fourth.
The HPI was still up 2.8% on an annual basis in the October-to-December period, slowing marginally from 2.9% growth in the third quarter and 5.2% in the second.
The euro zone's third largest economy contracted by 0.1% in the fourth quarter from the previous three months, following 0.4% growth in the third quarter, ISTAT reported earlier this month.
While Italian house prices were stagnant overall in the fourth quarter, there were marked regional and city-by-city disparities, ISTAT said.
Among large cities, Milan saw a quarterly rise of 1.8% while Rome and Turin saw declines of 0.2% and 1.7% respectively.
Despite the weakness in the second half of the year, over the whole of 2022 average house prices rose by 3.8%, the strongest reading since ISTAT's HPI series was introduced in 2010, driven by Italy's richer northern regions.
The price of new homes increased 6.1% from 2021, while existing houses were up 3.4%.
Looking ahead, a Bank of Italy survey last week showed that the country's estate agents see house prices declining in 2023.
Survey participants pointed to lengthening times frame required to close a sale due to a growing gap between asking and bidding prices.
Despite the slowdown in prices, a separate note published on Friday by ISTAT showed that the construction of new houses in January hit its highest level since last March last year. (editing by Gavin Jones)