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As we reach mid-2025, Italy's property market shows clear signs of growth, with national prices up 2.73% year-on-year in May 2025.
Northern regions like Trentino-Alto Adige and major cities including Milan and Venice are driving this upward momentum, while the European Central Bank's recent rate cuts are making mortgages more affordable for buyers.If you want to go deeper, you can check our pack of documents related to the real estate market in Italy, based on reliable facts and data, not opinions or rumors.
Italy's residential property prices are increasing moderately, with a national average of €2,104 per square meter as of May 2025, representing a 2.73% annual increase.
Northern regions are experiencing the strongest growth (4-7% annually), while green homes and new builds command significant premiums, with forecasts predicting continued growth of 3-4% annually through 2027.
| Metric | Current Value (June 2025) | Year-on-Year Change |
|---|---|---|
| National Average Price | €2,104/m² | +2.73% |
| Milan Price | €4,986/m² | +6.9% |
| Rome Price | €3,124/m² | +3.4% |
| Mortgage Rate (Average) | 3.18% | -0.71 pp |
| Transaction Volume Growth | 760,000 units (forecast) | +8% |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
What are the current average property prices in Italy as of June 2025?
The Italian residential property market shows significant regional variations in pricing, with the national average reaching €2,104 per square meter as of May 2025.
Northern Italy commands the highest prices, led by Trentino-Alto Adige at €3,482/m², followed by Valle d'Aosta (€2,843/m²), Liguria (€2,690/m²), and Lombardy (€2,519/m²). Central Italy sees moderate prices with Lazio averaging €2,490/m² and Tuscany at €2,508/m².
Major cities show even steeper price points, with Milan leading at €4,986/m², followed by Venice at €4,562/m², Florence at €4,331/m², and Rome at €3,124/m². These urban centers reflect strong demand from both domestic and international buyers.
Southern Italy remains the most affordable region, with Calabria offering the lowest prices at just €951/m². Other southern regions like Sicily (€1,161/m²) and Puglia (€1,422/m²) provide significant value opportunities compared to the north.
The price gap between Italy's most and least expensive regions exceeds €2,500 per square meter, highlighting the diverse investment opportunities across the country.
How much have Italian property prices increased in the past 12 months?
Italian residential property prices have shown moderate but steady growth over the past year, with national prices rising 2.73% year-on-year as of May 2025.
The house price index increased by 4.51% year-on-year in Q4 2024 (3.21% when adjusted for inflation), indicating solid momentum. However, Q1 2025 saw some moderation with prices rising 2.73% annually, suggesting a potential stabilization phase.
New homes experienced the strongest appreciation, jumping 9.35% year-on-year in Q4 2024 (8% inflation-adjusted), while existing homes rose more modestly at 3.43% (2.15% inflation-adjusted). This disparity reflects strong demand for modern, energy-efficient properties.
Rental markets have seen even stronger growth, with prices up 7.73% year-on-year to €14.22/m²/month. In major cities, rental growth has outpaced sales prices, with some areas experiencing double-digit increases.
It's something we develop in our Italy property pack.
Which Italian regions are experiencing the fastest property price growth?
Northern Italy dominates the growth rankings, with several regions posting impressive annual gains that significantly outpace the national average.
Trentino-Alto Adige leads with a remarkable 7% annual increase, rising from €3,057 to €3,285/m² in 2024. Veneto matches this performance with its own 7% growth, reaching €1,914/m².
| Region/City | 2024 Growth Rate | Current Price/m² | Growth Driver |
|---|---|---|---|
| Trentino-Alto Adige | +7% | €3,482 | Tourism & Alpine appeal |
| Milan | +6.9% | €4,986 | Economic hub & 2026 Olympics |
| Venice | +6.5% | €4,562 | Tourism & limited supply |
| Rome | +6% | €3,124 | Jubilee Year 2025 |
| Bologna | +5.1% | €3,450 | University city appeal |
Central and Southern Italy show more moderate growth or even slight declines in some areas, creating a two-speed market. This regional disparity is driven by economic differences, with the north benefiting from stronger job markets and infrastructure investment.
The upcoming 2026 Milan Winter Olympics is already boosting prices in affected areas, with some districts expected to see 10-25% premiums by the time of the event.
What property types are seeing the biggest price increases in 2025?
Green homes and energy-efficient properties are commanding the highest premiums in Italy's real estate market, with Class A/B rated homes selling for approximately €500/m² more than less efficient properties.
New-build apartments equipped with modern technology and sustainable features are experiencing the strongest appreciation, driven by remote work trends and environmental consciousness. Demand for eco-friendly homes is expected to rise by 20% in 2025.
Family-sized apartments in suburban areas with outdoor spaces are outperforming small city-center flats, reflecting post-pandemic lifestyle changes. Properties with terraces, gardens, or balconies command 10-15% premiums over similar units without outdoor space.
Luxury properties in prime locations continue their strong performance, particularly in Milan, Rome, Venice, and Florence. High-end properties in tourist destinations are benefiting from increased international interest.
The rental market for short-term tourist accommodations remains robust despite new regulations, with properties in historic centers of major cities seeing particularly strong value growth.
How do current prices compare to 5 and 10 years ago?
Italy's property market shows a stark contrast between recent gains and long-term stagnation, revealing unique opportunities for today's buyers.
Over the past five years (2020-2025), the national average has risen from below €2,000/m² to €2,104/m², representing moderate but steady growth of 2-4% annually. This period includes the pandemic recovery and recent market acceleration.
Looking back ten years (2015-2025), Italy's nominal house price growth of just 13.19% ranks among the lowest in Europe. Most neighboring countries like Germany, France, and Spain have seen increases of 50-100% over the same period.
From 2011 to 2024, Italian house prices actually fell by a cumulative 4.9% (24.2% when adjusted for inflation), making Italy one of the few European markets where prices are still recovering to pre-financial crisis levels.
This historical underperformance, combined with recent positive momentum, positions Italy as an attractive value proposition compared to other European markets where prices have already peaked.
What are the property price forecasts for the next 5 years?
Industry experts predict sustained moderate growth for Italy's residential property market, with prices expected to rise 3-4% annually through 2027.
Major cities like Milan and Rome are forecast to see 2-4% annual appreciation, while secondary cities could outperform with 3-5% growth. Milan could reach €6,500/m² by 2028, driven by the 2026 Winter Olympics and ongoing urban development.
| Time Period | National Forecast | Major Cities | Secondary Cities | Southern Regions |
|---|---|---|---|---|
| 2025-2027 | 3-4% annually | 2-4% annually | 3-5% annually | 4-6% annually |
| 2028-2030 | 2-3% annually | 2-3% annually | 3-4% annually | 3-5% annually |
| 2030-2035 | 2% annually | 1.5-2% annually | 2-3% annually | 2-3% annually |
Southern regions are expected to see accelerated growth of 4-6% annually as infrastructure improvements and EU recovery funds drive development. The €24 billion infrastructure program will particularly benefit connected cities.
Long-term projections suggest Italy's stable, non-speculative market will continue its gradual appreciation pattern, avoiding the boom-bust cycles seen in other European markets.
It's something we develop in our Italy property pack.
How are current ECB interest rate cuts affecting Italian property prices?
The European Central Bank has implemented four consecutive rate cuts in 2025, totaling 1 percentage point, significantly improving mortgage affordability across Italy.
Average mortgage rates have fallen to 3.18% for new loans as of February 2025, down from 3.89% a year earlier and 4.97% at the peak. This reduction saves borrowers approximately €41 monthly on a typical €200,000 variable-rate mortgage.
The improved financing conditions have directly boosted buyer confidence and market activity, with transaction volumes up 1.2% in Q2 2024 and expected to reach 760,000 units in 2025, an 8% increase from 2024.
First-time buyers and those refinancing existing loans are particularly benefiting from lower rates, driving demand in the €200,000-€400,000 price segment. Banks report increased mortgage applications and higher approval rates.
Market analysts attribute much of the recent price stability and growth to these favorable financing conditions, which are expected to continue supporting the market through 2026.
What impact did Italy's 2024 fiscal reforms have on property values?
The 2024 fiscal reform package has created strong incentives for energy-efficient property upgrades, directly impacting market values and buyer preferences.
Tax credits for renovations through the Superbonus program have driven significant value increases for upgraded properties, with renovated homes commanding 15-20% premiums over unrenovated equivalents. However, the program's cost has increased public debt concerns.
Streamlined property taxes have reduced ownership costs, making real estate investment more attractive. The reform particularly benefits owners of energy-efficient properties, who enjoy lower tax rates.
EU energy efficiency mandates, combined with Italian incentives, are accelerating the renovation of older housing stock. Properties failing to meet minimum energy standards face increasing marketability challenges.
The fiscal reforms have effectively created a two-tier market, with modern, efficient properties appreciating faster than older, inefficient ones, reshaping Italy's traditionally homogeneous property market.
Is foreign demand driving up Italian property prices in 2025?
International buyers are playing an increasingly significant role in Italy's property market, with foreign purchases expected to reach 60% of total transactions by end of 2025.
Northern regions attract 77% of all foreign property transactions, drawn by economic opportunities, infrastructure, and proximity to other European markets. Trentino-Alto Adige, Veneto, and Lombardy see the highest international interest.
American buyers are particularly active, taking advantage of the stronger dollar and remote work opportunities. The euro's weakness has increased US buying power by approximately 15% compared to two years ago.
Tourist destinations including Tuscany, Liguria, and the Italian Lakes continue attracting lifestyle buyers, while cities like Milan and Rome draw international investors seeking rental income opportunities.
Despite growing foreign interest, the share remains below pre-pandemic peaks, with growth strongest in the luxury and second-home segments rather than mainstream residential markets.
What economic factors are influencing property price trends?
Italy's property market reflects a complex interplay of economic indicators, with modest GDP growth of 0.7% projected for 2025 creating a stable but unspectacular backdrop.
Unemployment has fallen to 5.9% in February 2025, the lowest in 18 years, boosting household confidence and homebuying capacity. This improvement from 2024's 7.2% rate directly supports housing demand.
| Economic Indicator | Current Value | Trend | Impact on Property |
|---|---|---|---|
| GDP Growth | 0.7% (2025 forecast) | Stable | Moderate support |
| Unemployment | 5.9% | Improving | Positive |
| Core Inflation | 2.1% | Declining | Positive |
| Construction Output | +4.1% y-o-y | Growing | Supply pressure |
| Mortgage Rates | 3.18% | Declining | Strong positive |
Core inflation at 2.1% and falling toward 1.5-1.7% by 2026-27 supports ECB rate cuts, maintaining favorable financing conditions. Construction output growth of 4.1% year-on-year helps meet demand but remains insufficient to create oversupply.
Limited new residential supply continues supporting prices, with most construction focused on renovations rather than new builds, maintaining the supply-demand imbalance favoring sellers.
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How do Italian property prices compare to other European countries?
Italy offers remarkable value compared to other major European markets, with prices significantly below neighboring countries despite recent growth.
Italy's 10-year nominal house price growth of just 13.19% contrasts sharply with Germany, France, and Spain, where prices have surged 50-100% over the same period. This positions Italy as one of Europe's last value markets.
Major Italian cities remain affordable by European standards - Milan at €4,986/m² costs less than Paris, Munich, or Zurich, despite being Italy's financial capital. Rome at €3,124/m² offers exceptional value for a major European capital.
The combination of relatively low prices, improving economic conditions, and lifestyle appeal makes Italy increasingly attractive to international buyers seeking alternatives to overheated markets elsewhere in Europe.
This value gap is gradually closing as international buyers recognize Italy's potential, but significant opportunities remain, particularly in secondary cities and southern regions.
Will Italian property prices continue rising or face a correction?
Market fundamentals point to continued moderate price increases rather than a sharp correction, with Italy's stable, non-speculative market characteristics providing downside protection.
Limited new supply remains a key price support, with construction focused on renovations rather than new developments. This structural undersupply, particularly in desirable urban areas, prevents significant price drops.
Analyst consensus forecasts 3-4% annual growth through 2027, supported by favorable ECB policy, improving employment, and growing international interest. The market is characterized as having low speculative risk.
Potential risks include economic slowdown, fiscal tightening, or ECB policy reversal, but current indicators suggest these remain manageable. Italy's below-trend historical performance provides a cushion against major corrections.
The market shows healthy fundamentals with steady transaction volumes, reasonable price-to-income ratios compared to other European markets, and sustained demand from both domestic and international buyers.
We made this infographic to show you how property prices in Italy compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
Which Italian cities offer the best investment potential in 2025?
Secondary cities are emerging as top investment opportunities, offering better yields and growth potential than expensive primary markets like Milan and Rome.
Bologna stands out with 3% projected price growth, benefiting from its university, cultural appeal, and relatively affordable entry point at €3,450/m². The city's rental market remains strong due to student demand.
Southern cities like Naples and Palermo offer exceptional value with prices under €3,000/m² and forecast growth of 4-6% annually as infrastructure improvements take effect. Sicily's property transactions rose 9% in 2024.
Cities connected to Milan via improved transport links present opportunities to benefit from Olympics-related growth at lower entry prices. Bergamo, with 5.2% growth in 2024, exemplifies this trend.
Coastal towns in regions like Puglia and Calabria attract lifestyle buyers at fraction of northern prices, with strong rental potential during tourist season and growing international buyer interest.
Are green homes really worth the premium in Italy?
Energy-efficient properties command substantial premiums and offer superior investment returns, with the gap widening as regulations tighten.
Class A/B rated homes sell for approximately €500/m² more than inefficient properties, a premium that often exceeds renovation costs for strategic upgrades. Green homes also sell 20% faster on average.
- Lower utility costs save owners €1,500-3,000 annually
- Preferential tax treatment under 2024 reforms
- Higher rental income (10-15% premium)
- Better financing terms from green mortgages
- Future-proofing against tightening regulations
With EU mandates requiring minimum energy performance by 2030, inefficient properties face obsolescence risk. Upgrading now captures value before mandatory compliance drives renovation costs higher.
It's something we develop in our Italy property pack.
What are the hidden costs of buying property in Italy in 2025?
Total transaction costs typically add 10-15% to the purchase price, significantly impacting investment returns and requiring careful budgeting.
Registration tax varies from 2% (primary residence) to 9% (second homes), while VAT applies to new builds at 4-10%. Notary fees range from €1,500-3,000, with agency commissions typically 3-4% of purchase price.
Annual ownership costs average €3,000 for property maintenance alone, excluding taxes and utilities. Property tax (IMU) exemption only applies to primary residences, with second homes taxed at 0.76-1.06%.
Insurance costs are rising 7% annually due to climate risks, while condominium fees in apartment buildings average €100-300 monthly depending on amenities and location.
Renovation costs for older properties often exceed initial estimates by 20-30%, particularly when unexpected structural issues arise or when upgrading to meet energy efficiency standards.
Should you wait or buy Italian property now?
Current market conditions favor buyers ready to act, with the combination of rising prices and favorable financing creating a compelling opportunity window.
Mortgage rates at historic lows won't last indefinitely - ECB guidance suggests the current easing cycle may end by late 2026. Locking in current rates provides long-term savings worth tens of thousands of euros.
With prices rising 3-4% annually, waiting costs approximately €250-400 per month on a typical €300,000 property. Foreign buyers benefit from current euro weakness, which may not persist.
The 2026 Milan Olympics will drive prices higher in northern regions - buying now captures appreciation potential. Similarly, infrastructure investments and EU recovery funds are already priced into forward projections.
For long-term investors and lifestyle buyers, Italy's combination of lifestyle appeal, relative affordability versus European peers, and steady appreciation potential makes 2025 an optimal entry point.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
As of June 2025, Italian residential property prices are definitively rising, with the national average up 2.73% year-on-year and stronger growth in northern regions and major cities. The market shows healthy fundamentals supported by ECB rate cuts, improving employment, and limited supply.
Based on current trends, expert forecasts, and economic indicators, our conclusion is: Yes, property prices are going up in Italy. The combination of moderate but steady growth, favorable financing conditions, and Italy's relative undervaluation compared to European peers suggests continued price appreciation ahead.
Sources
- Global Property Guide - Italy Property Market Analysis 2025
- Immobiliare.it - Real Estate Market Statistics Italy
- Idealista - Italy Real Estate Outlook 2024-2025
- Investropa - 20 Statistics for Italy Real Estate Market 2025
- Cushman & Wakefield - Italian Real Estate Trends Preview 2025
- Gate-away - Italy Property Market Trends 2025
- Trading Economics - Italy Housing Index
- Realpoint Property - Italy Real Estate Prices 2024
- Italy Property Guides - Market Outlook
- European Central Bank - Monetary Policy Decisions
-Italy Real Estate for Foreigners: Complete Guide
-Is Buying Property in Italy Worth It?
-Buying Property in Italy: Common Pitfalls to Avoid
-Is Buying a House in Italy Worth the Investment?
-Buy a House in Italy and Get Residency: What You Need to Know
-Americans Buying Property in Italy: Essential Guide
-How to Buy a House in Italy as an American
-Average House Prices in Italy by Region
-Buying Property in Italy as an American: Step-by-Step
-Can You Buy Property in Italy Without Being a Resident?