Italian housing has been on the recovery path - but not for much longer

Rising housing affordability amid house price contraction and low interest rate environment , along with tax measures incentivizing house purchase , have supported a revival of the Italian housing market. B oth housing demand and supply have rebounded , as reflected by steady increases in the number of sales and dwelling investment over the last three to four years. While affordability continues improving and investment is needed to enhance the quality of the Italian housing stock , risks of political uncertainty and poor GDP growth will inevitably leave a mark on the labour and housing market s . Furthermore, recent increases in construction costs are likely to impede building activity . I n the medium term, should the economy improve, dwelling investment will respond to the need of tackling poor quality housing. Yet, further out, demand will soften on the back of ongoing population decline .