The Italian Real Estate Market in 2025: Analysis and Forecasts

710,000 Transactions: The Market Finds Its Balance

The Italian real estate market closed 2024 with approximately 710,000 residential transactions, a figure down 9.2% from the 2022 peak but substantially in line with the historical average of the previous decade. A soft landing after the exceptional post-pandemic years, confirming the structural solidity of the sector.

Prices, however, showed surprising resilience. The volume decline did not translate into a price decline: the Istat housing index recorded average growth of 0.8% in nominal terms, with major cities outperforming the national average.

The North Led by Milan

Milan confirms itself as the engine of premium Italian real estate. Average prices in the Lombard capital touched €5,800 per square meter in 2024, with the most sought-after neighborhoods (Brera, Porta Nuova, CityLife) exceeding €10,000. International demand, particularly from American, British, and Middle Eastern buyers, continues to support the luxury segment.

Turin and Genoa show recovery signs after years of stagnation, with growth of 4.2% and 3.8% respectively. The Northeast, driven by Venice and Trentino-Alto Adige, maintains solid performance thanks to tourism and second-home demand.

Central Italy: Tuscany Captivates Foreign Buyers

Tuscany remains the preferred destination for foreign buyers in central Italy, with Florence recording average prices of €4,200 per square meter and Chianti villas reaching peaks of €3,500-5,000 per square meter. American demand is particularly strong, supported by the favorable euro-dollar exchange rate.

Rome shows mixed signals: the historic center grows 6.3%, driven by tourism and short-term rental demand, while the suburbs continue to suffer from excess supply.

Southern Italy and Islands: Sardinia Leads

Southern Italy and the islands show the most interesting performance in terms of percentage growth. Sardinia leads the ranking with an average price increase of 14.7% in 2024, driven by international demand and scarcity of supply in premium coastal areas.

Sicily, with Palermo and Catania in strong growth, and Puglia, with Salento increasingly sought by foreigners, complete the picture of a South finally recovering ground relative to the North.

Forecasts for 2025

In my view, 2025 will be a year of consolidation for the Italian market. The ECB rate cut, already initiated in the second half of 2024, will gradually improve credit accessibility and support demand. I expect volume growth of 5-7% and price growth of 2-4% on a national average, with premium destinations (Milan, Sardinia, Tuscany) continuing to outperform.