Cluster Analysis and Italian Real Estate Market Analysis during the Downturn

This paper presents an approach called clustering analysis applied in order to identify different conditions of the Italian property market. The approach helps to understand the behaviour of the market and offers its characterization. The approach was applied to the last 15 years of data on Italian real estate market using a variety of demand-side variables and supply-side variables, such as the number of transactions, house stock, house prices, building permits, mortgages. The analysis has been conducted analysing data organised at Regional Level and Local Level (Provinces). Custer analysis is then used to determine the composition of different submarkets and to characterise them, in order to understand their different conditions and to assess the weakness of the different submarkets during the current downturn