General Overview
2024 looked like a transitional year. Geopolitical issues and interest rate cuts were the dominant themes. Ongoing conflicts showed no signs of de-escalation, while central banks initiated a policy of interest rate reductions following inflation stabilization, albeit more gradually than initially expected.
In the last quarter of the year, the ECB implemented a double 25-basis-point cut, bringing the reference refi rate to 3.15% (making it -1.35% in the year). Similarly, the Fed applied two 25-bps cuts in November and December, lowering the cost of money to 4.50% (-1% in the year). Meanwhile, the Bank of England took a more cautious approach, making only a 25-bps cut in the quarter, resulting in an interest rate of 4.75% (-0.50% in the year).
The U.S. elections, which saw the success of the Republican candidate, marked the end of the year and will inevitably influence the first months of 2025.
Following this outcome, the U.S. dollar has already shown significant strengthening.
Financial markets demonstrated resilience, with the S&P 500 reaching all-time highs in the last quarter and closing the year with a 23% increase compared to the previous year.
Some Figures
The inflation rate in Italy stood at 1.2%, confirming the stabilization observed throughout 2024.
This trend was also evident on a European scale, with the harmonized index measuring annual inflation showing a steady pattern, closing at 2.4%. Similarly, inflation appears distant from the 2022 peaks in the U.S. and the UK, with rates adjusting to 2.9% and 2.5%, respectively. However, in recent months, central banks in both economies have shifted towards a more conservative stance regarding interest rate easing.
With Italy’s industrial production index declining compared to 12 months ago (-1.6% YoY as of November) and GDP growth slower than predicted (+0.5% versus the forecasted 1%), it is surprising that the unemployment rate has reached its lowest level in 20 years (5.6%). These figures suggest two possible interpretations: new labor market entrants contribute less to productivity, or GDP growth is underestimated.
At the European level, Germany confirmed its GDP contraction. After a 0.3% decline last year, the figure for 2024 settled at -0.2%. A slight rebound is expected in 2025, though it may be hampered by the protectionist policies anticipated in the U.S. and the ongoing Russia-Ukraine conflict. According to previsions, the Eurozone GDP should remain below 1%, similar to that of the UK. This data shows that Italy's economy is growing slower than many of its neighbors. In the U.S., GDP for 2024 will settle around 2.7%.
Real Estate Market

The Italian real estate market continues along the trajectory of recent quarters, with the commercial property segment appearing healthier than the residential sector.
Although residential transactions in Q3 remained unchanged compared to the same quarter of the previous year, the total number of transactions recorded in the first nine months of 2024 was slightly lower than in the same period of 2023.
Over 44% of residential property transactions involved buyers using a mortgage, rising to 51.8% in Lombardy and 56% in the metropolitan area of Milan. These figures have increased quarter over quarter, influenced by interest rate trends that have undoubtedly stimulated the market.
As of the third quarter of the past year, 6.74% of transacted properties were newly built (source: Agenzia delle Entrate).

Commercial property transactions (including offices, banks, retail stores, shopping centers, hotels, and industrial properties) saw a notable increase, both compared to the same quarter in 2023 and in the total number of transactions recorded in the first nine months of the year versus the same period in 2023 (+5.9%). Excluding Milan, Q3 2024 was the most profitable quarter in available data since 2011.
Awaiting data from the year's final quarter - historically the most active in transactions - current figures suggest a further year-on-year increase in non-residential transactions, continuing a consistent post-COVID trend.
Regarding building permits issued for new residential properties, figures through Q3 2024 remained nearly unchanged (-0.2%) compared to the same period of the previous year. In contrast, permits for non-residential buildings increased by 5.4% (source: ISTAT).
Fonti dei Dati: Agenzia delle Entrate, ISTAT e tradingeconomics.com
Elaborazione: Darian RE
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