How much income for a house | Tortuga

What is the share of family income needed to buy a house, municipality by municipality? In 25 percent of cases it is higher than 30 percent, while in 10 percent of municipalities it is over 40 percent.

In our country the housing issue is at the center of the discussion with respect to social fragility even in the electoral campaign. In this article we present the preliminary results of a collaboration between Tortuga and Proxima areawith the aim of providing a clear picture of the situation.

With this in mind, we have produced a real estate accessibility index (o housing affordability index, HAI) at the municipal level, which indicates the percentage of disposable income spent on average by the household of each municipality to purchase a property. As a cost, we consider the annual sum of the mortgage payments corresponding to the average price of the properties in a municipality. Leaving aside the rental market, which affects the 19 percent of the populationItalian families continue to be inclined to property, also thanks to the availability of credit at low rates in recent years. The index therefore makes it possible to measure in a granular way the ease of access to real estate, filling the information need that is the basis of housing policies.

A similar measure is published by Omi-Abi annual real estate report, limited to the regional dimension. An aggregation of this type, however, does not allow to highlight the territorial variability of the housing contexts. In fact, it compares the real estate situation in the center of Milan to that of the small town in the Sondria mountains. By grouping such disparate housing contexts, the index is inconclusive and not very indicative for the implementation of adequate policies. The reports show, in fact, how all the Italian regions have, at different levels, a real estate market aligned with the economic possibilities of families, in which the percentage of annual income necessary to cover a mortgage does not exceed on average 30 percent, i.e. which is considered the symbolic threshold value to highlight critical issues in housing access. On the contrary, our analysis shows that most urban areas have inaccessible markets, revealing a housing emergency widespread in the most relevant areas of the country.


The real estate accessibility index is of interest in order to understand the housing needs in Italy in a granular way, as it does not limit itself to indicating who has the possibility or not to access the real estate market, but measures how stringent the access is. with respect to family finances. The index calculates the ratio between the annual cost of buying a house through a mortgage and household disposable income, both referred to the average municipal level. The average net income (figure 1) is derived from the data of the Revenue Agency on the total amount declared for tax purposes and the number of recipients per municipality in 2019. The total gross income declared is reported at the municipal level based on the Irpef bracket of reference, which we then transform into net values ​​through the respective rates. By adding these values ​​and dividing by the total number of taxpayers, it is possible to obtain the municipal average net income. To obtain the disposable income at the household level, we multiply the average value by the number of recipients per family reported by the 2011 census (the data used are the most recent available). The cost of ownership is calculated as an annual installment with a French depreciation rate on the average property price. For the measurement of real estate prices at the municipal level (figure 2) we use a methodology similar to that used by Omi, however, starting from a series of surveys in the period January-May 2022 at the level of a single property for sale on the main online real estate portals. The data, properly cleaned, are processed to obtain a dataset of properties whose values ​​represent theasking price per square meter. Appropriately discounted for the values ​​reported in Economic survey on the housing market in Italy at the macro-area level, finally, we measure the price of each property offered for sale in Italian municipalities as precisely as possible in the absence of direct access to official transaction data. The lack of this data for a substantial part of the municipalities in Central-Southern Italy derives mainly from the decision to remove from the study the territorial units (Omi areas) with a less active real estate market, in which we detect less than five advertisements per year and therefore we would not have a reliable estimate of the average value. In total, our study covers 5,683 out of 7,904 municipalities (about 80 percent of the total).

The data shows the classic inequality in terms of income between North and South, while the price of houses is particularly high in large urban centers and in tourist places.

Figure 1 and 2

How many municipalities exceed the alert threshold

The conventional alert threshold, used in similar US studies, corresponds to the need to use more than 30 percent of one’s disposable income to finance the house. While the Omi-Abi reports underline that none of the Italian regions exceeds this threshold in the last decade, the image that emerges from our index highlights strong criticalities.

Firstly, 25 percent of the municipalities in our group (i.e. at least 18 percent of the total Italian municipalities) have an accessibility index above the 30 percent threshold, while for 10 percent it is even higher than 40 percent (at least 7 percent). Table 1 shows the values ​​for some of the main Italian cities.

Figure 3


Secondly, the geographical analysis of the country as a whole (Figure 3) shows a strong polarization between urban and coastal areas compared to inland areas, characterized by greater accessibility due to fewer economic opportunities and less availability of services. Similarly, however, it is important to note that the gap between North and South in disposable incomes has an effect on the index. For example, while for the municipality of Milan the index stands at 34 per cent, despite housing prices being very high, in Naples it is 47 per cent: an average Neapolitan family, therefore, must employ almost half of its own income to buy a house.

Territorial and, above all, intra-regional heterogeneity are evident from the municipal focus and allow a better understanding of the areas that potentially need public intervention to facilitate housing accessibility, especially for the most vulnerable groups. Obviously, we are aware that the analysis at the granular level ignores internal migratory movements and tourist dynamics, analyzing “only” how much income the average family of a municipality should give up to buy a house in that same municipality. This leads to particularly high index values ​​in municipalities where the real estate market is not oriented towards satisfying internal demand, but rather that of tourists or workers moving from outside. In any case, the data remains of primary importance for the decisions on the policies to be adopted.

An index

The approach to the data shown here may prove useful to achieve greater awareness of the housing and social situation of the national territory. Despite the various assumptions necessary for the compilation of the index and even if the municipalities examined here are obviously not bubbles isolated from the surrounding environment, the availability of detailed information on the trend of the real estate market should be the starting point for any intervention. organic on the topic. At the same time, it is true that each place has a unique set of services and job market characteristics associated with it. Precisely for this reason, in a subsequent work we will try to investigate how different metropolitan centers today present a repulsive real estate market, which excludes a large part of the national population from the opportunities they also offer. It will allow us to deepen the characteristics of the housing emergency detected by our measure.

* Contributors to the creation of the article:
Gianluigi Chiaro: territorial economist and expert in housing policies and the real estate market. Founder of Area Proxima, specialized in social and economic research.
Giorgio Pietrabissa, PhD student in economics at Cemfi in Madrid and Senior Fellow of Tortuga.
Simone Valle, research assistant at the University of Chicago (Booth) and Senior Fellow of Tortuga.

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How much income for a house | Tortuga