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What is happening in Italy’s real estate market? Are prices going up or down? Is Milan still a hotspot for foreign investors? How is Italy’s government impacting real estate policies and taxes in 2025?
These are the questions everyone is asking us every day—professionals, buyers, and sellers alike, from Rome to Florence and beyond. Perhaps you’re wondering the same thing.
We know this because we stay deeply connected with local professionals and people like you, diving into the Italian real estate market every single day. That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market trends and dynamics.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Italy's mid-range property market will decline as buyers choose luxury or budget options
The Italian property market has been quite dynamic lately, with a 10% drop in residential transactions in 2023 compared to the previous year.
This decline was largely due to rising mortgage interest rates, which discouraged many from taking out loans to buy homes. Instead, people started looking at other options, especially in smaller towns in the North and Central regions, where property transactions saw some growth.
In contrast, major cities like Milan and Florence experienced a dip in property prices, indicating a shift in buyer interest. Real estate agents observed a clear preference for either luxury or budget housing, moving away from mid-range properties.
The luxury market has been on the rise since 2019, with a noticeable increase in demand for high-end homes. This trend is driven by affluent buyers who are less affected by interest rate hikes and are looking for exclusive properties.
Meanwhile, first-time buyers are gravitating towards more affordable options. High interest rates have pushed them to rely on personal savings rather than mortgages, making budget-friendly homes more appealing.
This shift in the market is also a reflection of the growing wealth gap, which has led to a clear division in buyer priorities. Buyers are now focusing on either luxury or budget properties, leaving mid-range options less popular.
Sources: Idealista News, MLS Forum, Mordor Intelligence
2) Italian residential property prices will stabilize soon with regional differences
The Italian property market is showing signs of stabilization after recent fluctuations.
In 2022, house prices in Italy saw a 3.1% increase, but growth slowed to just over 1% in 2023. Looking ahead, experts predict a slight rise in prices for 2024 and 2025, though inflation adjustments suggest a more stable market. This means that while prices might go up a bit, the real value when considering inflation could level out.
The Italian Housing Market Survey by the Bank of Italy and Tecnoborsa highlights a trend towards price stability, especially noticeable in the third quarter of 2024. One key indicator is that the average discount on asking prices has dropped to historic lows, meaning sellers are getting closer to their asking prices. Additionally, properties are selling faster, which is another sign of a stable market.
However, it's important to note the regional differences. In Northern Italy, cities are experiencing strong demand and limited supply, making it a bit challenging for buyers. This regional activity is a big reason why property prices vary across the country.
For those considering buying property in Italy, understanding these regional dynamics is crucial. In some areas, the market is more competitive, while in others, there might be more opportunities. This variation can affect your buying strategy and the type of property you might consider.
Overall, the Italian property market is expected to stabilize, but keep an eye on regional trends. They can offer insights into where the best opportunities might be, especially if you're looking to invest in a property that could appreciate over time.
Sources: Idealista, Bank of Italy, Bank of Italy
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3) Urban center yields will drop as more people choose homeownership over renting
In Italy's cities, more people are buying homes instead of renting.
Homeownership in Italy has hit a record high, with 75.20% of people owning homes in 2023. This shift is largely because owning a home offers stability and is seen as a smart long-term investment. In bustling cities like Rome, Milan, and Florence, the rental market is fiercely competitive, with an average of 13 people vying for each rental property. Despite this, the rental market faces challenges.
Rents have jumped by 8.8% over the past year, making renting less attractive. As more people buy homes, the demand for rentals might drop, leading to a slight dip in rental yields. This trend is further supported by more favorable mortgage options. In August 2024, interest rates fell to 3.59%, making it easier for people to afford homes.
Government incentives are also playing a role. For expatriates, there are reduced property tax rates, making buying a home even more appealing. These factors are nudging people towards homeownership, which could slightly impact rental yields in urban areas.
Sources: Trading Economics, Idealista, De Tullio Law Firm, Global Property Guide
4) Rental yields in tourist areas like the Amalfi Coast will rise sharply as travel rebounds
Rental yields in tourist-heavy areas like the Amalfi Coast are set to rise as travel picks up again.
Italy is buzzing with tourists, and it's not just a feeling—it's a fact. In 2023, 60.9 million tourists visited, and the numbers are expected to climb to 62.2 million in 2024. This surge means places like the Amalfi Coast are seeing more hotel bookings, which naturally pushes up rental yields. Imagine the charm of the coast drawing in more visitors, filling up hotels, and making rental properties even more attractive.
The Amalfi Coast isn't just about stunning views; it's a hotspot for short-term rentals. A typical listing here is booked for 274 nights a year, with a solid 75% occupancy rate. Hosts are raking in an average of €45,000 annually, thanks to a daily rate of €163. This kind of demand is a goldmine for property owners, leading to higher prices and better yields.
Tourists are not just visiting; they're spending big. In 2023, international visitors splurged over €50 billion, setting new records. This spending spree is a good sign for the tourism sector, hinting at higher rental prices and yields. With more people choosing private stays over hotels, platforms like Airbnb are thriving, making short-term rentals a hot commodity.
There's a shift happening—travelers are leaning towards private accommodations. This trend is evident with the rise of Airbnb, where people prefer the comfort and privacy of a home over a hotel room. This shift means short-term rental properties are in high demand, promising increased rental yields for property owners.
So, if you're considering buying property in the Amalfi Coast, the numbers are in your favor. With tourism on the rise and a strong demand for rentals, investing here could be a lucrative move. The combination of beautiful landscapes and a booming rental market makes it an enticing opportunity.
Sources: Airbtics, All Roads Lead to Italy
5) Foreign buyers will prioritize sustainable and energy-efficient homes in Italy
Foreign buyers are increasingly interested in sustainable and energy-efficient homes in Italy.
This shift is largely due to government incentives that make eco-friendly renovations more appealing. The Italian government has introduced schemes like the "superbonus 110%" to help low-income households with renovations until the end of 2024. Other programs, such as "Bonus Ristrutturazioni" and "Ecobonus," offer significant tax deductions for energy upgrades, making green renovations more attractive.
Italy's property market is seeing a rise in eco-friendly and sustainable properties, catering to environmentally conscious buyers, including those from the UK, US, and Northern Europe. The demand for green building certifications and developments is growing, and the market for green building materials in Italy is expected to expand, thanks to government measures and technological advancements.
Consumer surveys indicate a rising demand for energy-efficient homes with eco-friendly features. This trend is driven by a growing awareness of environmental issues, both in Italy and abroad. Media coverage has highlighted the benefits of sustainable living and the role of energy-efficient homes in combating climate change.
Foreign investors are particularly drawn to properties that offer green building certifications, reflecting a broader trend towards sustainability. This interest is not just about environmental responsibility but also about the long-term financial benefits of owning energy-efficient homes.
As Italy continues to promote sustainable living, the real estate market is likely to see more innovative eco-friendly developments that appeal to both domestic and international buyers.
Sources: Financial Post, Italian Business Lawyers, Bonafide Research
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6) International students will drive up rental demand in university cities in Italy
Italy is seeing a surge in international students, with over 27,000 study permits granted in 2023.
By 2024, the number of international students reached 109,681, mostly from European countries like Romania. This influx is creating a buzz in university cities, as these students need places to live.
Take Milan, for example. It's a hotspot for students, with nearly 175,000 students in the city. But here's the catch: only a small portion of them have access to student housing. With over 80,000 students commuting, many of whom are international, the demand for rental properties is skyrocketing.
Why is this happening? Well, Milan's charm and its spread-out university system make it a magnet for students. But the city just can't keep up with the housing demand. Only 8.6% of student housing needs are currently met, leaving a huge gap in the market.
Across Italy, about 620,000 students are on the hunt for private rentals. This is partly because international students prefer renting due to their short-term stay. This preference is boosting the rental market, as these students are not looking to buy.
So, if you're considering investing in property, university cities like Milan are worth a look. The student housing shortage and the influx of international students are driving up rental demand, making it a promising opportunity.
Sources: Erudera, Auraree, Schengen.News
7) Luxury property prices in Milan and Rome will rise due to limited supply and high demand
Luxury property prices in Milan and Rome are climbing, and this trend shows no signs of slowing down.
One big reason for this is the limited supply of new luxury developments in central areas. In 2023, more than 40% of real estate agents noticed a significant drop in available properties, while demand stayed strong or even grew, especially in these bustling cities. This scarcity is a key driver of rising prices.
In Milan, the average price per square meter is notably higher than in other Italian cities. In 2024, Milan topped the list of cities with a 6.9% increase in property prices, underscoring the strong demand in this market. This makes Milan a hot spot for those looking to invest in luxury real estate.
Adding to the mix, there's a noticeable influx of high-net-worth individuals flocking to these cities, further fueling the demand for luxury homes. This trend is particularly evident in Milan and Rome, where the luxury real estate scene is thriving.
The combination of limited supply and increased demand creates a competitive market. With more affluent buyers entering the scene, prices are likely to keep climbing. This makes it a challenging yet exciting time for potential buyers.
For those considering a purchase, understanding these dynamics is crucial. The market's competitive nature means that acting quickly and decisively can make all the difference in securing a prime property.
Sources: Idealista, Columbus International, MLS Forum
8) New property tax rules will boost foreign investment in Italian real estate
Italy has recently revamped its property tax rules, making it more enticing for foreigners to invest in real estate.
One of the standout changes is the reduction in the registration tax for primary homes, now just 2% of the cadastral value. This is a big drop from the 9% rate for second homes, making it financially smart for foreigners to think about buying a primary residence in Italy. The Italian government has also simplified the tax structure for foreign buyers. If you're buying from private individuals, mortgage and cadastral taxes are a mere €50. For purchases from companies, the VAT tax has been slashed from 10% to 4%, with other taxes capped at €200. This means the initial financial load on foreign investors is much lighter, making the Italian real estate market more inviting.
Another major perk is the introduction of the flat tax regime for wealthy foreign residents. This allows them to pay a flat rate of €200,000 annually on income earned abroad, no matter the amount, for up to 15 years. This is especially appealing for high-net-worth individuals and retirees, as it exempts foreign income from Italian taxes, including wealth and inheritance taxes. This offers a clear edge over other European countries.
These changes are not just about numbers; they reflect Italy's strategic move to attract more foreign investment. The country is keen on boosting its real estate market by making it more accessible and financially viable for international buyers. With these tax incentives, Italy is positioning itself as a top choice for those looking to invest in European real estate.
For those considering a move, these tax benefits could mean significant savings and a smoother transition into Italian life. The combination of reduced taxes and a simplified process makes Italy an attractive option for anyone looking to invest in property abroad.
Sources: First Home Incentives – 2024 Updates, Italy property market predictions 2025, The Italy Flat Tax Regime: Still Attractive in 2024?
Everything you need to know is included in our Property Investment Pack for Italy
9) Stricter short-term rental rules will reduce investment property profits in tourist areas
Stricter regulations on short-term rentals are shaking up the profitability of investment properties in tourist hotspots.
In places like Venice and Florence, these rules are a response to overtourism and housing shortages. Venice, for example, has ramped up inspections and slapped hefty fines on those who don't comply, making it tough for hosts to operate without the right paperwork. This means if you're thinking of buying a property here, you'll need to be ready for some red tape.
By 2023 and 2024, there was a noticeable drop in short-term rental listings in these areas. Many property owners in Venice have pivoted to medium-term rentals because of the restrictive short-term rental laws. In Northeast Italy, new rules like requiring a national ID code and safety gear have led to a dip in short-term rental listings, affecting a whopping 70,000 properties.
These changes have hit property owners' wallets hard. In Florence, a ban on new short-term rentals in the historic center has slashed the number of available rentals, cutting into their profitability. Plus, those fines in Venice and Northeast Italy are adding to the financial strain, making it even tougher to see a good return on investment.
For those eyeing property in these regions, it's crucial to understand how these regulations could impact your bottom line. The shift from short-term to medium-term rentals might be a necessary strategy to maintain some level of profitability. But keep in mind, the financial landscape is changing, and staying informed is key.
So, if you're considering investing in a property in these tourist-heavy areas, be prepared for a different kind of market. The days of easy short-term rental profits might be over, and adapting to these new rules will be essential for success.
Sources: Bnbcalc, Campaign for a Living Venice, Skift
10) Italy's aging population will drive demand for smaller accessible homes
Italy's population is getting older, with the median age now at 46.6 years.
In 2023, 24.3% of Italians were over 65, meaning there are more elderly people than children, with 5.8 elderly for every child. This shift is especially evident in regions like Trentino-South Tyrol, where people are living longer.
As life expectancy rises, the demand for homes that suit older adults is growing. Many seniors are looking for single-story homes or buildings with elevators to make life easier as they age.
The Italian property market is catching on to these changes. There's a noticeable trend towards smaller, more accessible homes, driven by both preference and necessity.
Financial factors also influence this shift. Retirees often downsize to manage their expenses, which further boosts the demand for these types of homes.
Sources: Xinhua News, Statista, eSales International
11) Turin's real estate market will thrive due to its rising status as a cultural and educational hub
Turin's real estate market is poised to thrive as the city becomes a cultural and educational hotspot.
In recent years, Turin has seen a surge in university enrollments, with over 70,000 students flocking to its institutions. This influx, including many international students, has injected new life into the city's cultural scene, making it a melting pot of ideas and traditions.
The city is buzzing with cultural events like the Salone Internazionale del Libro and Artissima, which attract large crowds and international attention. These events, along with the expansion of cultural gems like the Egyptian Museum, have made Turin a magnet for both locals and tourists.
Turin's transformation is also fueled by increased government investment in cultural and educational infrastructure. The city is seeing the renovation of historical landmarks and the creation of new cultural districts, which are enhancing its appeal and preserving its rich heritage.
Positive media coverage has played a role in boosting Turin's image, highlighting its commitment to culture and education. This has made the city even more attractive to potential residents and investors looking for vibrant communities.
Sources: Statista, UNWTO, Pearl Lemon Properties
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12) Remote work will boost demand for homes with dedicated office spaces
Remote work is booming in Italy, with many embracing the home office lifestyle.
In 2023, a whopping 82% of remote workers in Italy chose to work from home, showing a strong preference for home-based setups. This shift has sparked a noticeable trend: people are now on the hunt for homes with extra rooms or more space to set up their offices.
Real estate agents are seeing a surge in demand for properties that can accommodate these needs. Homes with dedicated office spaces are flying off the market as buyers prioritize creating comfortable work environments at home.
In response, real estate listings in Italy are now highlighting home office spaces as a major selling point. This change reflects the growing importance of having a dedicated workspace, which has become a must-have for many buyers.
Agents report that buyer preferences are shifting significantly towards properties with these features. The necessity of remote work is driving this change, as people look for homes that support their new work-life balance.
For those considering buying property in Italy, it's worth noting that homes with office spaces are in high demand. This trend is reshaping the real estate market, making it a key factor for potential buyers to consider.
Sources: Pumble, Houses of Italy, Statista
13) Apulia properties will surge in popularity with rising interest in agritourism and rural living
The Apulia region is becoming a hotspot for those interested in agritourism and rural living.
In recent years, there's been a noticeable shift towards sustainable and authentic travel experiences, and Apulia is right at the heart of it. While Tuscany and Trentino-South Tyrol have long been favorites, Apulia is catching up fast. The agritourism industry in Italy is booming, with expectations of 13.4% annual growth until 2030. This makes Apulia an attractive option for those looking to invest in a region that's on the rise.
Investment in Apulia, especially in the agri-food and tourism sectors, is thriving. Thanks to financial support from Intesa Sanpaolo, there's been a notable increase in agritourism accommodations and activities. This has made the region even more appealing to tourists who crave unique experiences. The rustic charm, stunning landscapes, and vibrant culture of Apulia are frequently showcased in the media, boosting its reputation as a must-visit rural destination.
There's also a growing trend towards rural and sustainable living. People are increasingly drawn to farm-to-table dining and outdoor activities, both of which are plentiful in Apulia. This trend aligns perfectly with the agritourism industry's focus on organic and farm-to-table experiences. The government is also on board, offering incentives for rural development, including a €1 billion credit allocation by Intesa Sanpaolo to support sustainable growth and employment in the region.
Apulia's appeal is further enhanced by its commitment to sustainability. The region offers a wealth of educational workshops and outdoor recreational activities, making it a perfect spot for those looking to embrace a more rural lifestyle. This societal shift towards rural living is not just a trend; it's a movement that's gaining momentum, and Apulia is at the forefront.
With its unique blend of culture, nature, and sustainability, Apulia is set to become even more popular. The region's focus on agritourism and rural living is attracting a diverse range of visitors and investors, eager to experience all that Apulia has to offer.
Sources: Statista, PeekPro, Intesa Sanpaolo
14) Smart home technology will be a crucial selling point for new properties in Italy
Smart home technology is becoming a big deal in Italy.
By 2024, the Italian smart home market was already valued at USD 1.17 billion, and it's expected to grow to USD 1.77 billion by 2029. This boom is fueled by Italians' love for smart living and the cool tech that comes with it. Imagine having a home that practically runs itself, saving you time and effort.
Italians are really into energy-efficient gadgets. Devices like connected boilers and smart thermostats are hot items because they help cut down on energy use. People are keen on these because they not only save money on bills but also help in reducing their carbon footprint. It's a win-win for both the wallet and the planet.
Home buyers in Italy are on the lookout for properties with smart tech. About 70% of them are willing to pay extra for homes that come with these features. They love the convenience, security, and time-saving aspects that smart homes bring. It's like having a personal assistant at home, making life a bit easier.
Smart features are not just about convenience; they also boost property values. Homes with integrated technology are seen as more attractive and sustainable. This means if you're selling, having smart tech could make your property stand out in the market.
As more people catch on to the benefits, smart home technology is set to become a key selling point for new properties in Italy. It's not just a trend; it's becoming a must-have for modern living.
Sources: Mordor Intelligence, Exploding Topics
Everything you need to know is included in our Real Estate Pack for Italy
15) Marche properties will attract buyers seeking affordable alternatives to Tuscany
Tuscany's property prices have soared, making it a costly choice for buyers.
In 2023, buying property in Tuscany could set you back €2,364 per square meter on average, with hotspots like Florence reaching nearly €4,000. Meanwhile, the Marche region is catching eyes for its affordability. Here, you can find properties for as low as €1,388 per square meter in Fermo and up to €1,786 in Ascoli Piceno, offering great value for money.
Marche isn't just about lower prices; it's also buzzing with activity. By 2024, the region saw a 5.51% rise in property sale prices, a clear sign that more people are discovering its charm. This uptick in interest is making it a hot spot for those seeking a slice of Italian life without the hefty price tag.
Tourism is also booming in Marche, adding to its allure. From January to August 2023, the region welcomed 7.93% more foreign visitors, highlighting its growing reputation as a must-visit destination. This influx of tourists is not only boosting the local economy but also drawing in potential property buyers.
Media outlets are catching on, too, spotlighting Marche as a rising star in the real estate market. With its picturesque landscapes and cultural richness, it's no wonder that more people are considering it over the pricier Tuscany. The region's blend of affordability and beauty is hard to resist.
For those looking to invest in Italian property, Marche offers a compelling case. Its combination of lower prices, increasing demand, and tourist appeal makes it a smart choice for buyers. As Tuscany becomes more exclusive, Marche stands out as a viable alternative for those seeking both value and charm.
Sources: Immobiliare.it, Idealista, Fued.it, August Collections, Italian Houses for Sale
16) Italian buyers will increasingly prefer eco-friendly homes with solar panels and green roofs
Eco-friendly homes with solar panels and green roofs are catching the eye of Italian buyers.
Thanks to the Italian government's push for solar energy, homeowners are finding it easier to invest in solar panels. With incentives like the auction system and net-metering program, people are enjoying lower energy bills and government perks. In recent years, Italy has seen a boom in solar panel installations, especially in residential areas, showing that solar energy is gaining traction among homeowners.
There's also a growing buzz around sustainable living. As climate change and eco-friendly architecture make headlines, more people are looking for homes with energy-efficient features. Real estate listings are now highlighting these green aspects, making them key selling points for potential buyers.
The Italian government is serious about sustainable housing, weaving eco-friendly homes into national policies. This long-term commitment is nudging more buyers to see these homes as not just viable but also attractive options.
In Italy, the trend towards eco-friendly homes is not just about saving money or following government incentives. It's also about a cultural shift towards sustainability, with more people wanting to live in harmony with the environment. This shift is reflected in the increasing number of properties featuring green roofs, which are known to reduce global warming and enhance urban biodiversity.
As more Italians embrace this lifestyle, the demand for eco-friendly homes is expected to rise. This trend is likely to continue, driven by both government support and a growing public awareness of the benefits of sustainable living.
Sources: pv magazine, Technavio, Statista, pv magazine
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.