News / Insights

The Italian Revenue Agency has published a new edition of the Observatory’s Working Papers, a collection of methodological and analytical contributions supporting tax and asset-related activities in the real estate sector. This volume is a rich source of insights for those working with data, valuations, and policies related to the Italian real estate market.

One of the essays focuses on the sales comparison method, exploring the concept of comparable properties and proposing a synthetic index that integrates, on the one hand, similarity measures based on property characteristics and, on the other, reliability indicators linked to prices. The approach combines the Analytic Hierarchy Process (AHP) with a nonlinear model of the Sales Comparison Method (SCM) and is tested on a case study in Rome’s OMI B20 zone, yielding good results in the selection of comparables.

Another contribution is dedicated to the energy performance of buildings: after reviewing the national legislative framework, the article analyzes the economic impact of energy efficiency on property value. Energy performance—increasingly central, especially in light of the EPBD Directive—is treated as an independent characteristic that specifically contributes to a property’s market price and can be modeled as both a continuous variable (energy consumption) and a categorical variable (energy classes). The analysis suggests that combining these two dimensions allows for a more comprehensive representation of the phenomenon.

Two additional essays focus on OMI zoning. The first addresses the issue of reconstructing historical price series following changes to zone boundaries, proposing a methodology to preserve the continuity of values over time. The second explores the use of points of interest—such as transportation, schools, and green spaces—to improve the description and delineation of OMI zones, enriching the understanding of local dynamics.

One article analyzes the relationship between banking policies and the residential market, focusing on the dynamics of loan-to-value ratios and mortgage interest rates, the effect of credit policies on transaction volumes, the use of the First-Home Guarantee Fund, and some evidence regarding the financialization of the residential sector in Italy.

Finally, the second part of the Quaderno features the Italian version of a methodological paper developed jointly by the Bank of Italy and the Revenue Agency, dedicated to reconciling administrative data with sample surveys for a more accurate measurement of real estate wealth in the country. This is an important tool for those who use asset data as a basis for analysis, assessments, and policy decisions.

The macroeconomic outlook for 2026 appears more stable than in the previous three-year period. In the euro area, inflation is expected to average 1.7%, with ECB rates around 2.15% and GDP growth between 1.0% and 1.2%, driven primarily by domestic demand. The United Kingdom is expected to grow between 0.9% and 1.2%, with inflation near 2% and rates in the 3.0–3.25% range, while Sweden stands out for its more dynamic outlook, with GDP expected to reach 2.6–3.1% and rates around 2%.

In this scenario marking the end of the rate-cutting cycle—historically favorable to the sector—the EPRA Index has averaged a +12.1% return one year after the ECB’s first rate cut and a +11.3% return one year after the last, figures significantly higher than those of other European equity sectors.

From a fundamentals perspective, the listed real estate sector is showing signs of strengthening. The average discount to NAV stands at 26.8%, a level observed in only 12% of monthly readings since 1989 and historically associated with three- and five-year annualized returns of 12.1% and 11.9%, respectively. Earnings multiples also remain compressed, with a price-to-EPRA-earnings ratio of 15.3 as of September 2025, compared to a ten-year average of 19.3. Profitability is improving, with ROA and ROE already back to pre-pandemic levels in Switzerland and the eurozone, and expected rent growth of 4.2% in 2026, well above projected inflation.

With approximately €28 billion in capital raised in 2025 and more favorable financing conditions, European listed real estate enters 2026 on a more solid footing, despite risks linked to geopolitical and political uncertainties and the evolution of monetary policy.