Milan and Rome continue to rank among the most important cities for Italy's luxury residential market. According to the World Cities Prime Residential Index 2025 by Savills, both cities performed strongly in 2024, with Milan experiencing substantial price stability and Rome showing growth. Forecasts for 2025 suggest a divergent trend: Milan is expected to maintain stable prices or see minimal variations, while Rome could see price increases ranging between 2% and 3.9%. Rental prices are also anticipated to rise, albeit with different dynamics in the two cities.
The global context: slowing prices and rising rent
On an international scale, luxury property prices are expected to rise by 1.6% in 2025, down from 2.2% in 2024. However, the rental market has shown greater dynamism: in 2024, across the 30 cities monitored by Savills, prime residential rents increased by an average of 4.3%, with significant spikes in Dubai (+23.5%), Bangkok (+15.4%), and Kuala Lumpur (+12.2%).
Among the most expensive cities, Hong Kong remains the priciest for purchasing a luxury home, while New York leads in terms of the highest rental costs.
Milan and Rome in the global context
Within the Savills World Cities Index, Milan ranks 11th for property prices, which have remained stable compared to 2023. Rome, on the other hand, is in 17th place with values on the rise, confirming greater dynamism than the Lombard capital.
In the prime rental market, both Italian cities saw increases in 2024, with Milan ranking 7th after London and Rome 9th after Singapore. The growing demand for luxury rentals in both cities is driven by a limited supply and the arrival of new residents, whether for work or study.
Forecasts for 2025: stability in Milan, growth in Rome
Projections for 2025 indicate price stability in Milan, with a modest rise in rental values (below 2%). In contrast, Rome is expected to maintain its positive trend from 2024, with luxury residential prices rising between 2% and 3.9% and rental growth of up to 2%.
The cities expected to see the highest price growth next year include Dubai, with an anticipated increase of 8% to 9.9%, followed by Sydney, Madrid, and Lisbon, all projected to rise between 4% and 5.9%. These locations are characterised by strong demand and limited supply, key factors in driving property values higher. Barcelona and Cape Town also stand out for their expanding markets, supported by a shortage of high-quality stock and improving local economic conditions.
The rental market: Dubai leads global growth
In 2024, 25 out of the 30 cities monitored saw an increase in prime residential rental prices, with an average rise of 4.3%. Dubai continues to lead luxury rental growth, driven by strong demand from new residents and high yields. Rental yields in Dubai reached 5.3% (+60 basis points year-on-year), while in Kuala Lumpur, they stood at 4.3% (+38 basis points).
Forecasts for 2025 suggest that prime rents will continue to rise in major global cities, albeit at a slower pace than the historical average. Dubai remains the frontrunner for rental growth, with an expected increase of over 10%.
The Italian market: resilience and new opportunities
Danilo Orlando, Head of Residential at Savills, highlights the strong resilience of Italy’s luxury residential market despite economic uncertainties in recent years.
"With 2024 still marked by high interest rates, we expect the demand for prime rental properties to remain strong in both Milan and Rome throughout 2025.
The scarcity of available properties continues to push rental prices up. Young professionals and students are moving to major cities, further driving demand, while the completion of certain Build-to-Rent (BTR) projects will inject new energy into the rental market."
On the sales front, Rome presents a more positive outlook than Milan, thanks to more accessible prices that could encourage a rebound in transactions and a slow but steady increase in property values, particularly in new developments. Milan, on the other hand, faces a more cautious outlook, following the rapid price growth seen in recent years.