Bloomberg News reports that increased rates and more restrictive credit standards are the cause of the decline, according to a study conducted by the Italian credit bureau CRIF SpA in association with the research group Prometeia and the lenders trade group Assofin. In the fourth quarter of 2011, the origination level fell by 19%; in the first quarter of 2011, the level only fell by 1%.
Separately, the Italian Finance Ministry reports that first-quarter 2012 home sales fell 20% to 110,000 transactions, the largest decline in at least eight years.
The situation may not be improving in the near future. In December 2011, Prime Minister Mario Monti signed a $24.6 billion austerity package that included an increase in property taxes. The significant weakening of the Italian economy has been a driving force in the ongoing crisis impacting Eurozone nations.