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What is happening in Florence’s real estate market? Are prices climbing or stabilizing? Is the city still a magnet for international buyers? How are local policies shaping the real estate landscape in 2025?
These are the questions we hear every day from professionals, buyers, and sellers alike, from the historic center to the charming outskirts. Perhaps you’re curious about these trends too.
We know this because we stay closely connected with local experts and people like you, exploring the Florentine real estate market daily. That’s why we crafted this article: to offer clear insights, thoughtful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to message us with your thoughts, and we’ll strive to enhance this content for you.
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1) Florence’s property prices will rise moderately as demand exceeds supply
Florence has been experiencing a steady rise in property prices over the years. By October 2024, the average price for properties in Florence reached around 4,316 euros per square meter, which is significantly higher than the national average. This trend has been consistent since December 2016, with a notable increase after February 2022.
One of the key reasons for this increase is the growing interest from international buyers. There has been a surge in foreign homebuyers, especially from the U.S., who are keen on purchasing properties in Tuscany, including Florence. This international interest has increased by 126.65% compared to pre-pandemic levels, indicating a strong demand for residential real estate in the area.
Additionally, the availability of new housing developments in Florence is limited. The rise in short-term rentals has made it challenging for long-term residents to find affordable housing, contributing to the upward pressure on property prices. Despite an increase in housing inventory nationwide, Florence has not seen a significant impact on prices due to many homeowners being locked into low-interest-rate mortgages, making them hesitant to sell.
Florence is also a highly desirable cultural and lifestyle destination, attracting both tourists and international buyers. This desirability further fuels the demand for residential properties in the city. The number of short-term rentals in central Florence has skyrocketed, exacerbating the strain on the local housing market and driving up prices for long-term rentals and purchases.
Sources: Statista, Benoit Properties, Travel and Tour World, Business Wire
2) Stricter short-term rental rules will lower rental yields in the historic center
In recent years, Florence has taken significant steps to regulate short-term rentals in its historic center. In 2023 and 2024, the city banned new short-term rentals, which directly reduced the number of licenses issued for such properties. This move was part of a broader effort to tackle overtourism and housing issues.
As a result of these regulations, there has been a noticeable decline in short-term rental listings. For example, while the number of flats listed on platforms like Airbnb had increased dramatically from 1,500 in 2018 to 9,000 by 2024, the introduction of stricter rules has started to reverse this trend. This decline in listings suggests that the market for short-term rentals is shrinking.
Moreover, property owners are being incentivized to switch from short-term to long-term rentals. The city has offered to write off second home city taxes for three years if owners make this switch. This shift in focus from short-term to long-term rentals indicates a change in the rental market dynamics, potentially leading to a decrease in rental yields in the historic center.
Additionally, real estate market reports have shown a shift in investor interest from short-term to long-term rental properties. This change is likely driven by the stricter regulations and the potential for more stable, long-term rental income. As more investors and property owners move away from short-term rentals, the competition for long-term rentals may decrease, impacting rental yields.
Sources: Skift, The Florentine, Travel and Tour World, Jack Costigan Real Estate
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3) Florence’s luxury property prices will steadily rise due to limited availability and strong demand
The luxury property market in Florence is set for a steady price increase due to limited availability and high demand.
Florence's property prices have been climbing, peaking at around €4,316 per square meter in October 2024. This trend highlights a robust market where values are consistently rising.
New luxury developments are scarce because of Florence's strict zoning laws and historical preservation rules. This scarcity naturally drives up demand and prices in the luxury segment.
Florence is attracting high-net-worth individuals, becoming a top investment hub. Affluent buyers and foreign investors are snapping up luxury properties, further boosting demand.
International buyers, especially from the United States, are increasingly interested in Florence. This influx contributes significantly to the high demand and rising prices in the luxury market.
With limited new developments and a surge in interest from wealthy buyers, Florence's luxury real estate market is thriving.
Sources: HVS, Columbus International, Statista
4) Florence will see rising demand for accessible, senior-friendly housing due to its aging population
In Florence, 28% of the population is over 65 as of January 2024.
This aging trend means there's a growing need for homes that cater to seniors. With life expectancy in Italy reaching 84.26 years by 2025, people are living longer and often need homes that are easier to navigate as they age.
Many seniors prefer to "age in place," which means staying in their own homes. This preference boosts the demand for houses that can be easily modified with features like walk-in showers and grab bars.
The senior housing market is bouncing back quickly, with occupancy rates rising due to the demand for specialized care. This surge in demand is outpacing the available housing, highlighting the need for more senior-friendly options.
Florence's charming neighborhoods and rich history make it an attractive place for retirees, but the city's infrastructure needs to adapt to this demographic shift. Developers are increasingly focusing on creating accessible living spaces to meet the needs of this growing population.
Investing in property here could be a smart move, especially if you're considering the needs of an aging population. Senior-friendly housing is becoming a hot commodity, and there's a clear opportunity for growth in this sector.
Sources: Statista, Macrotrends, NIC MAP Vision
5) Property values in Novoli will rise with the university campus expansion and increased student housing demand
The Novoli area in Florence is poised for a rise in property values, largely due to the expansion of the University of Florence campus and the increasing need for student housing. In recent years, the University of Florence has seen a significant student population, with approximately 40,415 students, including 11% international students. This growing student body is a key driver of housing demand in the area.
In 2023 and 2024, Ardian and Rockfield made a substantial investment in Novoli by developing a new purpose-built student accommodation facility. This facility offers 404 beds and includes modern amenities such as a pool, gym, lounge area, study rooms, and a cinema room. The high occupancy rate, nearing 100%, demonstrates the strong demand for student housing in Novoli, highlighting its potential for growth.
Moreover, real estate market reports have consistently shown a trend of rising property prices in university towns, driven by increased demand from students and professionals. The Novoli area, with its emerging status as a student hub and the presence of modern student accommodations, is becoming increasingly attractive to investors. This trend is further supported by the high rental yields observed in the area, making it a promising investment opportunity.
Sources: Times Higher Education, Ardian, HVS
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6) Price growth in Florence's historic center will slow as investors seek opportunities in less touristy areas
In recent years, we've seen a noticeable shift in the real estate market in Florence. The historic center, once the prime focus for investors, is experiencing a slowdown in price growth. This change is largely due to a combination of factors that have emerged over the past couple of years.
Firstly, the growth rate of property prices in the historic center has been slowing down. In 2023, prices increased by only 3.5%, which is less than in other areas. Additionally, the number of transactions in the historic center dropped by 16.9% from the previous year, indicating a cooling interest in this area. This suggests that investors are starting to look elsewhere for better opportunities.
Meanwhile, less touristy neighborhoods like Michelangelo, Porta Romana, and Oltrarno have become more attractive. These areas offer lower average selling prices compared to the historic center, making them appealing to investors looking for more affordable options. For example, in October 2024, the average selling price in these areas was significantly lower, which could entice more buyers.
Moreover, there's anecdotal evidence from local real estate agents about increased inquiries for properties outside the historic center. This shift in interest is likely driven by the high demand and limited supply in the historic center, making it less attractive for new investors. Additionally, rental yields in non-central districts are rising, offering better returns for investors. In the Oltrarno area, for instance, rental yields are quite attractive, further drawing interest away from the historic center.
Sources: Savills UK, Global Property Guide, First Online, Statista
7) Virtual reality tours will become popular in Florence, enabling international buyers to view properties remotely
Virtual reality tours have become increasingly popular in Florence, especially for international buyers looking to view properties remotely. In the past, specifically in 2023 and 2024, there was a significant rise in the adoption of virtual reality technology in real estate globally. More than 50% of adults had taken a virtual tour, and 67% of home buyers expressed a desire for virtual tours when considering a property listing.
Real estate listings that included a virtual home tour received 87% more views, and potential buyers spent 5-10 times longer on websites with a virtual tour compared to those without. This trend was particularly evident in Florence, where the real estate market continued to attract investors, with 23% of property purchases made for investment purposes in 2023, surpassing the national average of 19.5%.
Additionally, consumer surveys from that period indicated a strong preference for remote property viewing options. A notable 54% of buyers would not even consider viewing a house if it did not include a virtual tour, and homes with virtual tours sold for 9% more on average than those without. These statistics highlighted the importance of virtual tours as a tool for real estate agents in Florence.
Sources: PhotoUp, Columbus International
8) Foreign investors will increasingly target San Marco for its proximity to major attractions
The San Marco neighborhood in Florence is catching the eye of foreign investors for several compelling reasons.
One big draw is the rising property prices in central Florence, which hit around 4,316 euros per square meter in October 2024. This surge shows a growing demand for real estate in areas like San Marco, making it a hot spot for investment.
San Marco's charm is also in its proximity to iconic landmarks like the Accademia Gallery and the Florence Cathedral. These cultural gems are a magnet for investors who value heritage, adding to the neighborhood's appeal.
Florence itself is seeing a boom in tourism, which is boosting real estate demand. The city's rich history and attractions make it a favorite destination, pushing up property prices and drawing in foreign interest.
Moreover, the San Marco area is buzzing with new developments and renovations. Investors are keen on these modern amenities and infrastructure, which promise a blend of old-world charm and contemporary living.
Sources: Statista, Columbus International, The Florentine
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Italy versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
9) Investors will increasingly target the Oltrarno district for its traditional charm and emerging artisan shops
The Oltrarno district in Florence is catching the eye of investors for its unique blend of old-world charm and new artisan shops.
In recent times, property prices in Oltrarno have been on the rise, signaling a growing demand. This uptick is largely because the area offers a mix of traditional allure and a fresh wave of artisan businesses, making it a hot spot for both locals and investors.
Walking through Oltrarno, you'll notice a surge in artisan shops and local businesses. Craftspeople like bookbinders, restorers, and glass blowers are thriving here, adding to the district's rich artisanal heritage. This not only boosts the cultural vibe but also attracts more visitors, making it even more appealing to investors.
There's also a buzz among international buyers. Surveys show a growing interest from those wanting to invest in culturally rich neighborhoods like Oltrarno. The allure of owning property in an area steeped in culture and history is a big draw.
All these elements combined make Oltrarno a promising area for investment. The district's unique cultural and historical significance is a major attraction for those looking to invest in Florence.
Sources: HVS Market Report, The Crowded Planet, Claire in the World
10) Tax incentives for energy-efficient homes will boost demand for sustainable properties in Florence
The Italian government is offering new tax incentives for energy-efficient home renovations.
These incentives, known as the Superbonus, are part of the Italian Budget Law 2023 and provide a tax credit of up to 110% for energy-efficient upgrades. Although the credits will decrease over time, they are extended through 2024 and 2025, making it financially smart for homeowners to invest in these upgrades. This is expected to boost demand for sustainable properties in Florence.
Energy-efficient homes are not just good for the environment; they also sell at a premium. Studies show that homes with better energy efficiency scores can fetch higher prices, with premiums ranging from 2% to 8% in different markets. This potential for increased resale value makes these homes more attractive to buyers, further fueling demand in Florence's real estate scene.
There's a noticeable shift towards sustainable living, driven by the European Union's push for energy-efficient buildings and a growing awareness of environmental issues. This change in consumer preferences is likely to increase interest in sustainable properties. Media coverage highlighting the benefits of energy-efficient homes, such as lower utility costs and reduced environmental impact, also plays a significant role in sparking consumer interest.
Florence, with its rich history and vibrant culture, is becoming a hotspot for sustainable living. The combination of government incentives and consumer demand is creating a perfect storm for the rise of energy-efficient homes in the area. Buyers are increasingly looking for properties that not only offer comfort but also align with their values of sustainability and environmental responsibility.
As more people become aware of the financial and environmental benefits, the trend towards energy-efficient homes is expected to grow. This shift is not just a passing fad but a long-term change in how people view homeownership and investment in real estate.
Sources: Detulliolawfirm, ENERGY STAR, Bruegel
11) Foreign buyers in Florence will increasingly focus on sustainable and eco-friendly properties
Interest in sustainable homes is booming as people become more eco-conscious.
Many international buyers are now looking for properties that reduce their carbon footprint and use renewable energy. This change in mindset is reshaping the real estate market, with a noticeable trend towards green living among foreign buyers.
In Italy, the government is encouraging sustainable building with incentives and certifications like Protocollo ITACA and CasaClima Nature. These certifications help assess a building's environmental impact, pushing for more eco-friendly developments.
Florence, with its rich history and culture, is seeing a shift in its real estate market. Buyers are increasingly interested in properties that not only offer charm but also meet modern sustainability standards. This trend is expected to grow as more people prioritize environmental responsibility.
Local real estate agents note that properties with features like solar panels and energy-efficient systems are becoming more popular. This shift is not just a trend but a reflection of a broader movement towards environmentally responsible living.
As the demand for sustainable homes rises, Florence is poised to become a hotspot for eco-friendly real estate, attracting buyers who value both tradition and innovation.
Sources: The Madrona Group, Lightbox, Baker McKenzie
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12) New short-term rental rules will affect the profitability of Airbnb-style investments in Florence
In recent years, Florence has implemented strict regulations on short-term rentals, particularly in its historic center. This area, a UNESCO World Heritage site, has seen a ban on new short-term rental registrations to combat housing affordability issues and the effects of overtourism. This means that investors looking to start new Airbnb-style listings in this prime location face significant barriers, potentially reducing the number of new properties entering the market.
Additionally, all short-term rental operators must now register their properties and obtain approval from local authorities, which involves meeting various compliance requirements. This process can be cumbersome and time-consuming, adding an extra layer of complexity for property owners. Moreover, hosts are required to collect and remit a local tourist tax, which can impact the overall profitability of their rental operations.
Historically, short-term rentals in Florence have been quite profitable, with high occupancy rates and substantial annual revenues. However, the introduction of these regulations has led to a decrease in the number of available listings, which in turn has driven up property prices. This dynamic suggests that while existing properties may benefit from reduced competition, the overall market for new investments is becoming less attractive due to regulatory hurdles.
Sources: BNB Calc, Airbtics, Cleanbnb
13) Young professionals in Florence will boost demand for modern, tech-enabled apartments in central areas
Young professionals moving to Florence are increasingly attracted by the city's vibrant startup ecosystem, which has seen significant growth in industries like Edtech, Healthtech, and Ecommerce. This influx of entrepreneurs and tech-savvy individuals is driving the demand for modern, tech-enabled apartments in central locations.
The rising rental prices in central Florence, particularly in areas like Oltrarno, reflect this high demand. In November 2024, rental prices increased by 7.62% compared to December 2023, indicating a strong interest in living spaces that offer modern amenities and smart home technology.
Florence's urban development strategy, which includes a Smart City Plan, aligns with the preferences of young professionals for tech-enabled living spaces. The city's investment in smart technologies and infrastructure improvements further supports the demand for modern apartments in central areas.
Sources: Immobiliare.it, StartupBlink, EIB, Think Global People
14) Florence's student housing yields will decline due to increased competition and new developments
In recent years, the student housing market in Florence has seen a significant increase in new developments. For instance, in 2023, AXA IM Alts acquired a 400-bed student accommodation project, which is expected to offer high-quality amenities and communal spaces. This is part of a broader trend of new construction permits for student housing, which is increasing the supply of accommodations in the city.
Additionally, there is growing competition from international student housing operators. Agencies like Florence and Abroad Rental Agency have been working with international colleges and universities for decades, indicating a strong presence of international operators in the market. This increased competition is likely to impact the yields for existing student housing providers.
Moreover, the popularity of short-term rentals through platforms like Airbnb has led to a housing shortage in Florence, causing lower rental prices for student accommodations. Although the city has banned new short-term residential leases to address this issue, the oversupply of student housing could still lead to declining rental prices in the long term.
Sources: OM in the News, AXA IM Alts, Florence and Abroad
We have made this infographic to give you a quick and clear snapshot of the property market in Italy. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
15) Property prices on Florence's outskirts may dip slightly as central locations become more desirable
In recent years, we've seen a noticeable shift in property preferences in Florence. The outskirts of the city have experienced a slight decline in property prices. This trend is largely due to a decreasing demand for properties in these areas. For instance, data from Immobiliare.it showed a 1.03% decrease in the average price for residential properties in the province of Florence from December 2023 to November 2024.
On the other hand, central locations in Florence have become increasingly popular. People are drawn to these areas for their convenience and lifestyle benefits. The Oltrarno area, known for its historical charm and modern conveniences, has seen significant price increases, with an average sale price of €5,800 per square meter in November 2024. This indicates a strong preference for central locations.
Moreover, central Florence has witnessed increased investment and development, particularly in luxury housing projects. This has further driven demand and increased prices in these areas. Additionally, rental prices in central areas are notably higher compared to the outskirts, highlighting the preference for living centrally.
Sources: Immobiliare.it, Immobiliare.it
16) Demand for affordable shared housing near universities will rise with more international students arriving
The influx of international students in Florence has been notable, with the University of Florence experiencing a 20% rise in international student enrollment between 2020 and 2023. Many of these students come from countries like China, India, and Brazil, contributing to the growing diversity and demand for housing in the city.
As more international students arrive, the demand for student housing near universities in Florence has been on the rise. Local real estate agencies have reported a surge in inquiries and bookings for shared accommodations, indicating a strong need for affordable housing options. This trend is further supported by surveys showing that 70% of international students prefer shared housing due to its affordability and social benefits.
The availability of student housing in Florence is limited, which, combined with the rising demand, has led to higher prices and increased competition for existing accommodations. The rising cost of living in Florence, with rents increasing by 15% between 2022 and 2023, is also pushing international students to seek more affordable and shared housing options to manage their expenses.
17) Rental yields in Florence's suburbs will rise as more families look for larger living spaces
Remote work is reshaping housing demands, with more people seeking larger homes in the suburbs.
As property prices soar in central Florence, families are on the hunt for more affordable and spacious homes in the suburbs. These areas offer better value, making them an attractive option for those looking to stretch their budget.
There's a noticeable uptick in family households moving to suburban areas. Families are drawn to the peaceful environment and extra space that suburban living provides, which is boosting the appeal of rental properties in these regions.
Surveys highlight that families are increasingly favoring suburban life for its perks, like more room, superior schools, and a safer atmosphere. This growing preference is driving up the demand for rentals in these areas.
With improved infrastructure and transportation, commuting from the suburbs to central Florence is becoming easier. This enhanced accessibility is fueling the expansion of suburban rental markets, making them more appealing to families.
Reports indicate that rental yields are higher in suburban areas compared to central locations. The demand for larger living spaces, coupled with a limited supply, is pushing these yields upward.
Real estate experts foresee a rise in suburban property values as the demand for housing in these areas continues to grow. This trend is expected to persist as more families opt for suburban living.
Sources: Bold Business, Upjohn Institute
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.