Market

In Italy, real estate investment continues to attract great interest, particularly for those destined for commercial and hospitality activities. In 2024, buying and selling prices are showing a 2.6% increase, driven mainly by new construction and properties upgraded and made efficient thanks to the superbonus and all other incentives provided for energy efficiency. The rental market, on the other hand, is down 2.5% due to low supply, but rents are up 5.5%. Factors contributing to the upturn in buying and selling include confidence in falling mortgage rates, buying for investment, and the desire to buy a green home to reduce operating expenses, while the scarcity of properties and the high cost of renovations are among the main brakes. On the other hand, the market for real estate for tourist use has been on the rise, again since 2023, with prices for buying and selling (2,820 euros per square meter commercial, +4.6% annually) and renting (+5.9%) on the rise buying and selling of second homes, which remains on the rise compared to the traditional housing market.

The health emergency from Covid-19 has also hit hard the housing market sector, with nearly 46 thousand transitions lost in 2020. The downfall in foreigners’ tourist arrivals has negatively affected the sector, particularly for the vacation rental market. Also the residential and commercial real estate market was struggling in 2020, which was still suffering from the effects of the 2008 economic crisis. Slightly bucking the trend, however, was the rental market, which, thanks to the presence of smart working, received longer rental applications in 2020 than in previous years. As the coronavirus has been gradually contained and we returned to near normalcy, the housing market has picked up again, particularly in 2021, thanks to increased buying and selling and increased demand. Again, agile work has affected buyers’ choices to some extent, with 11 percent of them choosing a home with a room (or more) to be used as an office.

The real estate market in Italy continues to attract great interest, with certain cities standing out as favorite destinations for real estate purchases. Italians’ choices reflect a combination of economic, social and cultural factors that determine the tendency to invest in certain areas. A recent study analyzed the cities where interest in home buying is most pronounced, showing significant changes in regional preferences. The most sought-after apartment or house type remains the three-room apartment, which is considered essential for families and accounts for nearly 50% of the demand for homes in large Italian cities, with two-room and one-room apartments sharing almost all the rest of the demand. The only exception is Milano, where demand for two-room apartments is predominant. Sales times are around 105 days, the same as in 2023, with Bologna and Milano remaining below average at 68 and 81 days respectively…

…According to a recent survey, Milano is confirmed in first place among the cities where Italians prefer to buy homes. The Milanese city attracts thanks to its economic dynamism, wide range of services and job opportunities. The central and semi-central areas of the city continue to be in high demand, despite the high prices. In second place is Rome, where the housing market retains a strong attraction due to its vast housing supply and historic charm. Suburbs are registering growing interest, especially among young people and families looking for more affordable solutions. Naples, on the other hand, takes the third position, thanks to more competitive costs and the revitalization of some strategic areas. The research also highlights an increase in interest in medium-sized cities such as Bologna and Turin, which offer a balance between quality of life, lower costs and access to essential services… 

…This phenomenon reflects the desire of many Italians to move to more livable settings without sacrificing proximity to major urban centers. These trends provide key indications for real estate operators, guiding development and investment strategies. The centrality of cities such as Milan and Rome demonstrates the need to respond to growing housing demand with innovative and sustainable projects. Interest in medium-sized cities suggests growth potential for less saturated markets, offering attractive opportunities for both buyers and investors. In an environment of rising inflation and interest rates, the housing market remains a sound and strategic form of investment. Finally, the diversification of preferences reflects a cultural shift, in which quality of life and the balance between work and leisure are taking on an increasingly prominent role. These dynamics will help shape the future of the Italian real estate sector.