Real estate rallying on signs of recovery. All eyes are on the Fed.

A positive week for the Italian real estate sector, outperforming the European sector, following signs of the sector's good health. Central banks, especially the Fed, are in the spotlight, but there are also mixed numbers regarding the sector's health overseas.

From the central banks

The most important meeting of the week was with the Fed: from Jackson Hole, Chairman Jerome Powell reiterated the importance of monitoring data and keeping inflation under control, but also opened the door to possible interest rate hikes in September.

On the ECB front, President Christine Lagarde confirmed her expectation of a slowdown in the Eurozone economy in the third quarter of the year, due to the increase in tariffs imposed by the US on goods imported from the EU.

The Central Bank of Iceland this week decided to keep its key interest rate unchanged at 7.50%, despite headline inflation standing at 4% in July.

Macro data of the week

Mortgage applications are declining again in the United States. In the week ending August 15, 2025, the index decreased by 1.4% , after increasing by 10.9% the previous week. Refinance applications fell by 3.2%, while new applications increased by 0.1%. Rates on 30-year mortgages rose to 6.68% from 6.67% previously.

U.S. existing home sales reached 4.01 million units in July, beating expectations (3.92 million) and marking a 2% increase on a monthly basis and a 0.8% growth on an annual basis.

Instead, the NAHB US housing confidence index stood at 32 points in August, compared to 33 points the previous month and against the consensus of 34.

In the United Kingdom , the house price index compiled by Rigtmove signaled a further decline in house prices, recording a 1.3% month-on-month decrease in August, following a 1.2% decline in July, and a 0.3% increase year-on-year. The index compiled by the ONS statistical office also disappointed, posting a 3.7% year-on-year increase, lower than the previous month's 3.9% and the consensus estimate of 4%.

News from the sector

A survey by Facile.it and Mutui.it confirms that the mortgage market , and consequently the real estate market, are experiencing a favorable phase , thanks in part to the improved conditions offered by banks in the wake of the ECB's rate cuts . In the first six months of the year, those applying for financing requested an average mortgage of €137,315 , a 3.1% increase compared to the same period in 2024. The amount requested isn't the only parameter to increase; the average value of the properties subject to the mortgage also rose, reaching €208,405 (+1%), the repayment term, which increased from 24 to 25 years, and the average LTV, i.e. the ratio between the value of the mortgage and the property, which reached 72%.

On the corporate front, the merger of two UK real estate fund managers , Federated Hermes Property Unit Trust (FHPUT) and Legal & General's Managed Property Fund (MPF), was announced this week. Together, they will manage £4.7 billion in assets under management. This is just the latest move in the UK's industry consolidation.

Also worth mentioning is French commercial real estate management company Frey , which has signed a strategic partnership agreement with Cale Street , a real estate investment and finance company founded in 2014 in partnership with the Kuwaiti sovereign wealth fund, for the acquisition of three of Italy's main shopping centres – Franciacorta (Lombardy), Valdichiana (Tuscany) and Palmanova (near Trieste) – from Blackstone for 410 million euros.

The performance of the sector on the stock market

The real estate sector on the stock market had a very positive week, doing better than the pan-European Stoxx 600 Real Estate index, which did not record any significant changes (+0.1% on a weekly basis).

The Italian FTSE Italia All Share Real Estate Index, on the other hand, showed a solid increase of 2.35%, even outperforming the FTSE MIB market index, which recorded a gain of 1.44%.

Among the real estate companies listed on the Milan Stock Exchange, Brioschi performed best, gaining 6.79% on the week. The worst performer was NextRe , which fell 6.71%. Also among the best performers this week were Aedes (+4%) and IGD (+3.28%), while AbitareIn closed the week in the red (-2.13%). Gabetti (+0.29%) and Risanamento (-0.50%) posted fractional gains.