Prices of Residential Property in Italy: Constructing a New Indicator

We present a new indicator of house prices in Italy, with more extensive geographical and time coverage. The new indicator now makes it possible to analyze medium- and long-term trends with satisfactory representation of the Italian housing market. It also allows for timely updating, for prompt assessment of housing input both to the business cycle and to inflationary pressures. We offer a preliminary identification, based solely on graphical inspection, of four different property price cycles since the late 1960s; the latest began at the end of the 1990s and signaled a slowdown since 2006. Finally, we tentatively assess the effect of including transactions in dwellings in the Italian HICP basket according to the net acquisition approach, which apparently results in about a quarter point of additional inflation each year since 2000.