Authored by the expert who managed and guided the team behind the Italy Property Pack
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What will happen in Umbria’s real estate market? Will prices go up or down? Is Perugia still a hotspot for foreign investors? How is Italy’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with local real estate agents, property developers, and clients who buy properties in Umbria, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
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.
1) Rental yields in Umbria's cities will fall as property prices rise faster than rents
Property prices in Umbria's urban areas are climbing, especially noticeable in 2023 and 2024.
By November 2024, the average price for homes in Umbria hit €1,162 per square meter, a jump of 2.38% from December 2023. In Perugia, prices are even steeper, reaching €1,210 per square meter, making it the priciest spot in the region.
Meanwhile, rental prices are lagging behind. As of November 2024, the average rent was €7.72 per month per square meter, up just 3.76% from December 2023. This slower growth in rent compared to property prices is causing rental yields to dip.
Looking at similar areas in Italy, rental yields have been stable but not rising significantly. For instance, the average gross rental yield in Italy dropped slightly from 7.38% in Q1, 2024, to 7.04% in Q3, 2024. This pattern suggests that while property values are on the rise, rental yields aren't keeping up.
In Umbria, this means that as property prices continue to climb, rental yields are likely to decline, especially in urban areas. Investors might find that the return on rental properties isn't as lucrative as it once was.
Sources: Immobiliare.it, KMM Realty, Global Property Guide
2) More foreign buyers will seek Umbria’s affordable luxury homes over Tuscany’s
In recent years, foreign buyers have increasingly turned their attention to Umbria for its affordable luxury properties, especially when compared to Tuscany. In 2024, the average price for residential properties in Umbria was €1,162 per square meter, which is significantly lower than Tuscany's average of €2,451 per square meter. This price difference makes Umbria an attractive option for those seeking luxury without the hefty price tag.
Moreover, the growing interest in Umbria is supported by the increasing number of international real estate agencies promoting the region. Agencies like SpecialUmbria offer specialized services to guide foreign buyers through the acquisition process, enhancing the appeal of Umbria as a destination for property investment. Additionally, media coverage has highlighted Umbria as an emerging luxury destination, emphasizing its unique cultural and natural attractions.
Surveys have shown that foreign buyers are drawn to less crowded and more authentic Italian regions, and Umbria fits this description perfectly. The region offers a more affordable lifestyle compared to Tuscany, making it an attractive option for those looking to experience Italy's charm without the hustle and bustle of more popular areas. Furthermore, real estate analysts predict growth in Umbria's property market, driven by its unique offerings and increasing appeal to foreign buyers.
Sources: Studentsville, SpecialUmbria, August Collections, Immobiliare.it
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Italy. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) Property values near Lake Trasimeno will increase as it becomes a popular spot for water sports and leisure activities
Properties near Lake Trasimeno are becoming hot commodities as the area gains fame for water sports and leisure activities.
Every year, the "Lights on the Trasimeno" event lights up the region, drawing crowds and highlighting its vibrant cultural scene. Since its start in 2019, this event has been a beacon for visitors, showcasing the area's unique charm and keeping interest alive. The festival's success is a testament to the region's growing allure.
The Trasimeno Glamping Resort is a game-changer, promoting exciting water sports like windsurfing, kitesurfing, and wakeboarding. This surge in active holiday options is making the area a magnet for tourists and potential property buyers. New leisure facilities, including water-skiing schools and boat rentals, are popping up, showing a clear investment in tourism infrastructure.
Local authorities are also stepping up, preserving historic sites and boosting local productions, which adds to the region's charm. Positive buzz on travel platforms about the area's natural beauty and water sports is driving up demand for vacation rentals and properties. Real estate prices are climbing, especially in historic and lake view areas, indicating a thriving market.
For those eyeing a property investment, Lake Trasimeno is a promising spot. The combination of cultural events, sports activities, and scenic views is a winning formula. Investors are taking note of the area's potential, with more people looking to buy in this picturesque locale.
As the area continues to develop, the appeal of Lake Trasimeno is only set to grow. With ongoing investments and a steady stream of visitors, the future looks bright for property values in this beautiful region.
Sources: Umbria Tourism, Trasimeno Glamping Resort, Gate-Away
4) Property prices in Umbria will keep rising as more international buyers show interest
In recent years, Umbria has seen a notable increase in international property purchases. From June 2020 to June 2021, there was a significant rise in purchase requests, with 41 sales announced, predominantly in the province of Perugia. This trend indicates growing interest from international buyers, with a diverse mix of nationalities including British, German, and American buyers.
The surge in tourism numbers in 2023 further supports the region's growing appeal. With a 55.5% increase in tourists compared to the previous year, Umbria attracted visitors from countries like the United States, Germany, and France. This influx of tourists often translates into increased interest in property investments as visitors seek to own a piece of the region they have come to admire.
Moreover, the appreciation of property values in Umbria over recent years highlights the region's potential as a lucrative investment. By November 2024, the average price per square meter for residential properties had risen to €1,162, marking a steady increase from the previous year. This upward trend in property values is a clear indicator of the region's growing desirability among international buyers.
Sources: Great Estate Network, Schengen News, Realpoint Property
5) Interest from British buyers in Umbria will remain strong thanks to good exchange rates and the region's appeal
British buyers love Umbria for its charm and quality of life.
Over the years, the real estate market in Umbria has consistently attracted foreign buyers, especially from the UK. This steady interest is fueled by the region's unique appeal.
One key factor is the favorable exchange rates between the British pound and the euro, making Italian properties more affordable for Brits. With the British economy stable, this trend is likely to continue.
Umbria is often highlighted in travel guides and luxury magazines. Harper's Bazaar UK even calls it "the new Tuscany", showcasing its growing reputation.
The region boasts UNESCO World Heritage Sites, charming towns, and vibrant cultural events, all adding to its allure for potential buyers.
Sources: Harper's Bazaar
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6) Demand for larger homes in Umbria will grow as multi-generational living becomes more popular
In Umbria, there's a growing trend of multi-generational living that's catching attention.
Families in Italy, especially in Umbria, are leaning towards living arrangements that keep everyone under one roof. This isn't just about tradition; it's also about economic benefits and the comfort of having family close by. Many young adults in Italy still live with their parents, which shows a strong cultural preference for extended family living.
Recent real estate reports highlight a noticeable increase in the demand for larger homes in Umbria. In late 2024, the average price for residential properties went up by 2.38%, signaling a robust market for spacious homes. People are looking for houses that can fit multiple generations, driven by an aging population and the need for flexible living spaces.
Italy's demographic trends show an aging population, which is expected to continue growing. With people living longer, there's a clear need for homes that can accommodate both older and younger family members. This means the demand for larger homes in Umbria is likely to keep rising as families adapt to these changes.
In Umbria, families are increasingly seeking homes that offer enough space for everyone, from grandparents to grandchildren. This shift is not just about space but also about creating a living environment that supports the evolving needs of families. As life expectancy increases, the trend of multi-generational living is expected to drive the demand for larger homes even further.
Sources: Immobiliare.it, Sutter and Nugent, The Globalist
7) Property prices in Spoleto will fall as it competes with livelier cultural hubs
The Spoleto area is struggling to keep up with more lively cultural hubs in Umbria, leading to a drop in property prices.
Spoleto is quieter than bustling hilltowns like Perugia and Assisi, hinting at a waning interest from tourists. This shift is evident as fewer visitors choose Spoleto, preferring the more vibrant scenes elsewhere.
Real estate reports show that property prices in Spoleto have dipped over the past year. In November 2024, the average price for residential properties was €1,189 per square meter, slightly down from the previous year. Real estate agents confirm that buyers are increasingly looking at other areas in Umbria.
Spoleto also sees less cultural investment compared to its neighbors, which could draw more tourists and potential buyers to those areas. Media often spotlight the cultural buzz in Perugia and Assisi, leaving Spoleto in the shadows.
This lack of attention and investment might be why property demand in Spoleto is declining. The town's offerings are overshadowed by the more dynamic attractions of nearby towns.
As a result, Spoleto's real estate market is feeling the pinch, with buyers shifting their focus to more culturally vibrant areas in Umbria.
Sources: Immobiliare.it, Italy Notes
8) Property prices in rural Umbria will drop as younger people move to cities
The decline in property prices in rural areas of Umbria is largely due to the aging population and the steady decrease in younger residents. This trend has been observed in many rural parts of Italy, where younger people often move to larger cities in search of better job opportunities and amenities.
Despite some young families moving to rural areas for a simpler lifestyle, this movement is not significant enough to counteract the larger trend of younger generations heading towards urban centers. The preference for urban living is driven by the availability of better job prospects, educational resources, and amenities, which are more concentrated in cities.
Additionally, the real estate market in Umbria shows that properties in rural areas are experiencing slower sales and longer times on the market. This is because the demand from younger generations is decreasing as they move to urban areas, leaving fewer people interested in sustaining the rural property market.
Sources: Pulitzer Center, Immobiliare.it, Idealista
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) Property yields in Umbria will rise as more retirees choose the region
In recent years, Umbria has become increasingly popular among retirees, and this trend is expected to continue driving up property yields in the region. One of the main reasons is the growing number of retirees moving to Umbria, as highlighted by Nancy and Luther Hampton's experience. They found Umbria to be an ideal retirement location due to its affordability compared to the US, with lower costs for housing, groceries, healthcare, and dining out.
Additionally, property prices in Umbria have been on the rise. In November 2024, the average price for residential properties was €1,162 per square meter, marking a 2.38% increase from December 2023. This steady rise in property prices is likely fueled by the increasing demand from retirees and foreign buyers. Furthermore, rental prices have also seen growth, with a 3.76% increase in November 2024 compared to December 2023, indicating a rising demand for rental properties.
Tourism in Umbria has also surged, with a 55.5% increase in the number of tourists from January to May 2023 compared to the previous year. This growing interest in the region can contribute to higher property yields. Moreover, improved infrastructure and healthcare facilities, as appreciated by retirees like the Hamptons, make Umbria an attractive option for those looking to retire.
Positive reviews and media coverage highlighting Umbria as a retirement destination further enhance its appeal. The development of retirement communities and facilities in the region also indicates a growing recognition of Umbria's potential as a retirement hub. This development can attract more retirees, thereby increasing property yields.
Sources: Immobiliare.it, International Living, Schengen.news
10) Property prices in Perugia will rise significantly as the city grows as a cultural and educational center
Perugia is rapidly becoming a cultural and educational hotspot, drawing attention from around the world.
With universities like the Università degli Studi di Perugia and the Università per Stranieri di Perugia expanding, the city is attracting a diverse student body from various countries. This influx of students is not just boosting the educational scene but also adding a vibrant, youthful energy to the city.
Perugia's cultural scene is thriving, thanks to events like the Umbria Jazz Festival and the Perugia Eurochocolate festival. These festivals are not just local highlights; they draw international crowds, bringing significant economic benefits to the area. The city's commitment to preserving historical sites, such as the Rocca Paolina, further enhances its cultural appeal.
The increase in international students has led to a higher demand for housing. This surge in demand is pushing property prices up, as students and tourists alike look for places to stay. The buzz around Perugia is growing, making it a sought-after destination for both living and studying.
Positive media coverage is playing a big role in this transformation. As more people hear about Perugia's charm and opportunities, the city's reputation as a desirable place to live and learn is solidifying. This is attracting not just students but also cultural tourists who want to experience the city's unique offerings.
With all these developments, investing in property in Perugia seems like a promising opportunity. The city's evolution into a cultural and educational hub is likely to continue driving property values upward.
Sources: Italia.it, Comune di Perugia, Umbra Institute
11) Property values with scenic views in Umbria will rise as natural landscapes are preserved
Efforts to preserve natural landscapes in Umbria have been supported by increased government funding, such as the LIFE Programme, which co-finances projects aimed at managing and restoring habitats. This initiative helps maintain the region's natural beauty, which is a key factor in property value appreciation.
In the past, Umbria's strict regulations on development have played a crucial role in maintaining property values. By preserving its natural and historical landscapes, the region attracts buyers who are interested in unique and well-located properties, thus sustaining and gradually increasing property values.
Moreover, the correlation between environmental quality and property prices is well-documented. In Umbria, the preservation of natural landscapes contributes significantly to the region's appeal, which in turn enhances property values. This trend is expected to continue as the region remains a desirable destination for both tourists and property buyers.
Sources: CINEA, Argiletum Tour
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12) Rental demand in Umbria will rise as more tourists opt for long-term stays
The demand for rental properties in Umbria is on the rise as more tourists opt for long-term stays.
In 2023, Umbria saw a 55.5% increase in tourist arrivals compared to the previous year, highlighting a growing fascination with the region. This surge is not just about short visits; people are looking to immerse themselves in the local culture and lifestyle.
Umbria's charm and natural beauty make it a perfect spot for those seeking sustainable and cultural tourism. The trend of digital nomadism is also playing a role, as professionals are choosing scenic locations like Umbria to work remotely, boosting the demand for rental properties.
In Assisi, for example, there's been an 8% rise in vacation rental listings over the past year. This increase reflects a broader trend where travelers prefer authentic local experiences, aligning perfectly with Umbria's unique cultural and natural appeal.
People are not just visiting; they want to live like locals, which is why traditional residential properties are becoming more popular. The region's ability to offer a genuine Italian experience is a major draw for those looking to stay longer.
With its picturesque landscapes and rich history, Umbria is becoming a top choice for those seeking a deeper connection with Italy. This growing interest is expected to keep driving the demand for rental properties in the area.
Sources: Schengen News, AirDNA, All Roads Lead to Italy
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.