The past week in the financial markets was marked by high tension and volatility, starting with a market crash triggered by fears of a recession in the United States. Disappointing labor market readings, the BoJ’s rate hike strengthening the yen, and Warren Buffet halving his position in Apple all contributed to the heavy selling on Monday. However, the markets began to recover in the following sessions, especially in the United States, as other macroeconomic data eased concerns about the US economic cycle.
Looking ahead, all eyes are now on the Central Banks‘ moves in September, with the Fed and the ECB expected to lower interest rates. This is seen as beneficial for the real estate market, which has been struggling due to high borrowing costs.
In terms of indexes, the real estate sector in Europe had a negative week overall, with the STOXX Europe 600 Real Estate index reporting a -1.2% decline. However, Italy stood out with the FTSE Italia All Share Real Estate index posting a more than 4% increase, outperforming the market index.
On Borsa Italiana, real estate stocks had a mixed performance. Risanamento and IGD saw gains, while Gabetti, Aedes, Brioschi, Next Re, and Dotstay experienced declines. With thin trading volumes in August and the end of the earnings season, there were few operational ideas during the week.
On the macroeconomic front, the United States provided some interesting data. Mortgage applications in the US saw an increase, with rates on thirty-year mortgages falling to their lowest level in over a year. This was attributed to an overreaction to a less than favorable jobs report and financial market turmoil.
In Italy, data from Istat showed a decline in real estate market activity in 2023 compared to the previous year. Notarial sales agreements were down, particularly in the housing sector, while economic sector growth was driven by the North-East. Notarial agreements for mortgages and loans also decreased significantly.
Market research also focused on holiday rentals, with SoloAffitti reporting an increase in bookings and prices compared to the previous year. The trend of hit-and-run holidays continued, with shorter stays being more common.
Overall, the past week was a rollercoaster ride for the financial markets, with various factors influencing investor sentiment. As we look ahead to September and the expected Central Bank moves, the real estate market and other sectors will be closely watched for further developments.