The outlook for 2025 is marked by challenging forecasts, with uncertainties stemming from central bank decisions and the ongoing trade war. However, the real estate market in Italy has reasons for optimism. The recovery of the credit market is driving property transactions, and the positive cycle that began in 2024 is expected to continue into the current year. This is the key takeaway from the 1st Nomisma Real Estate Market Observatory, which provides forecasts on prices, transactions, and mortgages in Italy through to 2027.
Forecasts for prices, transactions, and mortgages 2025-2027
The decline in interest rates and the improvement in the purchasing power of Italians, driven by increased employment, are giving a boost to property transactions, particularly those assisted by mortgages. According to Nomisma's Senior Project Manager Johnny Marzialetti, the real estate forecasts from 2025 to 2027 are as follows:
Regarding new mortgage loans, the figures are expected to return to pre-COVID levels, with €46 billion disbursed in 2025, €46.3 billion in 2026, and €46.1 billion in 2027. For mortgage refinances and replacements, €5.2 billion is expected in 2025, €6.7 billion in 2026, and €7 billion in 2027, representing 10-13% of the total over the three years.
As for real estate transactions in Italy, 2025 is projected to reach around 776,000, with 2026 and 2027 expected to see 782,000 transactions. Residential property prices are anticipated to rise by 1.4% in 2025, and by 1.5% in both 2026 and 2027, while retail and office prices are expected to remain largely stable.
Upcoming next trends in the real estate market
The Italian real estate market is showing signs of optimism, driven by steady demand and increasing transactions. According to the Nomisma Real Estate Observatory report, presented by Nomisma's Real Estate Manager Elena Molignoni, 2024 closes with a 1.3% increase in transactions compared to the previous year, reaching 719,578, particularly boosted by a positive performance in the last quarter (+7.6%). The mortgage market also shows significant growth, with a 19.5% increase in the rate of change for financed transactions in the final quarter of the year.
Rising prices and strong demand
In terms of property values, residential prices in Italy are showing increases that absorb inflation: +2.1% in intermediate markets and +1.5% in primary markets. No significant differences are emerging between new and existing properties, although in some cities, like Perugia, well-maintained homes are experiencing higher growth than older properties (+3.2% versus +1.9%).
In major urban centres, the difficulty in accessing property purchases has shifted interest towards rentals, while secondary markets continue to favour buying. The rental market remains dynamic, with rents rising by 3.4% over the past year, though this is still constrained by households' spending power.
Return on investment and selling times
The overall gross yield on residential properties in Italy stands at an average of 7.7%, up from the previous year, due to rising property values. Market liquidity remains high, with absorption times and discounts remaining minimal compared to the past ten years. A residential sale typically takes less than five months on average, while rental times stabilise around two months. The average discount on the sale price is about 10%.
According to Elena Molignoni, in 2025, the growth of property transactions is expected to consolidate, with a 2% increase in rental contracts and a 4% rise in rents. "Access to credit conditions should remain favourable, while the supply of properties on the market will remain at current levels, without a clear shift towards renting," comments Molignoni.
Focus on Milan and Rome
The report also analysed trends in the real estate market in Italy's two main cities. In Rome, the growth of transactions and prices remains slow but steady, although still below the levels seen in Milan. The forecasts for 2025 indicate stability for Milan, which in 2024 recorded around 24,000 transactions (-3.4% compared to 2023), while Rome is expected to see a 2.1% increase compared to 35,999 transactions last year.
Experts attribute the stability of the Milan market to favourable credit access and the financial solidity of households. In contrast, in Rome, transaction growth will be supported by real estate investments and rising rental prices, pushing many to consider buying as a more affordable option.
Overall, the Italian real estate market seems set for another year of consolidation, with positive dynamics in both the buying and rental sectors.
The Italian mortgage market according to Nomisma
Focusing on the credit market, Nomisma’s Senior Project Manager Chiara Pelizzoni highlights how residential transactions, which plummeted by 9.5% in 2023 due to central bank policies and inflation, have slightly recovered with a 1.3% increase in 2024. This is seen as a hopeful sign for the recovery of property transactions. The recovery is largely driven by mortgage-assisted transactions, which for individuals have risen from 39.9% in 2023 to 41% in 2024, accompanied by a decrease in the percentage of non-performing loans.
There has also been a shift in the trend for mortgage-assisted transactions; in 2023, transactions with mortgages declined sharply in all four quarters (with a maximum drop of -33.4% in Q2), while transactions without mortgages remained steady or grew. In 2024, the trend reversed, with mortgage-assisted transactions growing by over 19% in Q4, while non-mortgage transactions declined by around 3% each quarter. This shift is attributed to the improvement in interest rate conditions.
A similar reversal has occurred in new mortgage disbursements, which decreased in 2022-2023 but are now rising by 10.5% in Q3 2024. New loans are primarily focused on fixed rates, although in March 2025, the Eurirs rate is expected to exceed the three-month Euribor (2.76% versus 2.41%).
Risks and challenges for the Italian real estate market in 2025
"2024 marks a turning point after the crises of previous years, which suggests a phase of growth in 2025," summarises Andrea Bontempi, Managing Director of Nomisma. This recovery is seen in the strengthening of the mortgage market and corporate investments, particularly for office properties in Milan and Rome.
However, the real estate market is not immune to risks, particularly:
- A market with low liquidity, yet 70% of properties are owned by individuals.
- Difficulty in finding sustainable housing solutions, not just for traditionally weaker groups.
- Increasing challenges for under-35s in accessing both property purchases and rentals, with the risk of losing demographic dynamism.
- The crisis of neighbourhood shops.
- Challenges in adapting the Italian property stock to ESG (Environmental, Social, Governance) standards.
- Difficulty in effectively reintroducing properties for repurposing.
The three key challenges to address are:
- Rebalancing property prices and incomes.
- Rebalancing property risks and returns.
- A technological revolution as an innovation driver to address the above issues, such as controlling construction costs or improving energy efficiency.
The new international dimension of the Italian property market
The Italian property market is attracting a growing number of foreign buyers. This is the finding of our analysis of residential property sales in five major Italian cities: Rome, Milan, Turin, Cagliari and Florence – all destinations already well known and appreciated abroad.
Cheap villas in Italy near the beach
Dreaming of a second home by the sea in Italy? Whether you're planning to enjoy sunny summers, escape for long weekends, or even relocate permanently, a villa by the coast might be more affordable than you think.
Top Italian coastal towns for buying holiday homes in 2025
The Italian coastal tourist property market continues to show strong momentum in the first half of 2025, with rising trends across various regions of the country. According to reports from the Tecnocasa Group, seaside locations—both on islands and along the central-southern coastline—are experiencing an overall increase in demand, particularly from international investors and buyers attracted by the quality of life and the income potential from short-term rentals.
The cheapest seaside towns to buy a home in Italy
Buying a second property on the Italian coast is a dream for many – and not a well-kept secret. But how much does it really cost? These are the cheapest seaside towns to buy a home in Italy in 2025.
Italy’s property market outlook 2025: sales and prices on the rise
Italy’s residential property market is showing clear signs of recovery. This is the finding of the latest Residential Quarterly Outlook – H1 2025 published by Patrigest, the research and valuation company within the Gabetti Group. The figures speak for themselves: in the first six months of the year, transactions increased by 11.2% compared with the first half of 2024, with over 172,000 sales completed. Prices have also seen an average increase of 2.5% across Italy’s ten largest cities, co
Urgent property sales in Italy
Buying a home in Italy, especially as an international buyer, can sometimes be a lengthy process. However, focusing on properties listed for urgent sale can help you secure a fantastic deal quickly and efficiently.
Piedmont attracts international property investors as market rebounds
The Italian property market in Piedmont is once again on the radar of international investors, boosting transactions and consolidating the sector’s positive trend. Leading this revival is the regional capital, Turin, where property prices have reached €2,000 per square metre, according to the Real Estate Data Hub compiled by Remax.