The aim of the paper is to evaluate the influence of macro-economic and demographic variables on residential mortgage growth in Italy. This study will expand the indicator of macroeconomic variables considered in the analysis of mortgage trends and will also include demographic variables. The objective is to identify if and what is the relationship between the following variables and the provision of loans in the Italian market.
The sample consider all banks presents in Italy for which residential mortgage data are available in the balance sheet. The data are yearly and the time period analysed from 2002-2016. Bank control variable are collected from Bank of Italy database while macro-economic variables are from ISTAT and Eurostat database.

The methodology adopted is the multiple regression analysis. We have as dependent variable the outstanding residential mortgage and as independent variable:

  • Average Yearly Inflation Rate
  • Average Yearly GDP growth Rate
  • Average Yearly Exchange Rate
  • Percentage Informal Sector Employment
  • Treasury bill rate
  • National Saving Rate
  • House Price Index
  • Structural Dependency Index
  • Index of resident foreigners
  • Number of leases

For each variable, in order to evaluate the relations within each other, we will run the following tests:

  • Test of Normality
  • Correlation test
  • Multicollinearity Test

Expected results: 

We will expected that GDP per capita, House Price Index, informal sector employment and inflation have the highest influence on mortgage growth in Italy, while, demographic factors should show a negative impact on residential mortgage but not relevant for Italian market.