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Is the Italian green mortgage market ready to take off?

Author

Listed:
  • Luigi Abate

    (Bank of Italy)

  • Valeria Lionetti

    (Bank of Italy)

  • Valentina Michelangeli

    (Bank of Italy)

Abstract

The nascent green mortgage market in Italy appears set for takeoff, with several promising indicators now in evidence. In 2022, the green mortgages issued by banks, accounting for over 50 per cent of total assets in the Regional Bank Lending Survey, reached over 6 per cent of the total volume of household mortgages, reflecting the growth in both demand and supply. Significant institutions (SIs), which are also the banks that grant the vast majority of green loans, are more aware of the energy efficiency of the collateral of loans. Given that SIs, the dominant players in the market for household loans, are already in the green mortgage market or are planning to enter it in the next few years, this segment could expand much further. An econometric analysis based on mortgage offers data provided by the main Italian mortgage broker indicates that, in the period from September 2022 to June 2023, the interest rate differential between non-green and green mortgages (green mortgage discount) was about 7 basis points on average.

Suggested Citation

  • Luigi Abate & Valeria Lionetti & Valentina Michelangeli, 2024. "Is the Italian green mortgage market ready to take off?," Questioni di Economia e Finanza (Occasional Papers) 868, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_868_24
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    References listed on IDEAS

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    More about this item

    Keywords

    green mortgages; pricing; banking;
    All these keywords.

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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