Italy’s residential property market is closing 2025 on a strong note. According to the latest quarterly report from the Real Estate Observatory (OMI) of the Agenzia delle Entrate, home sales in the third quarter of the year rose by 8.5% compared with the same period in 2024, confirming a positive momentum that has been building throughout the year. Between July and September, approximately 175,000 residential properties changed hands across the country.
A nationwide rise in transactions
Growth has been widespread, with both major cities and small towns recording higher sales volumes. Provincial capitals saw transactions rise by 7.3%, while smaller municipalities performed even better, with a 9% increase. The strongest growth was observed in north-western Italy and the islands (+9.5%), followed by the north-east (+8.5%) and central regions (+8.3%). Southern Italy recorded a more moderate rise of 6.3%.
First-home buyers and an uptick in mortgage use
First-time buyers continued to drive a significant share of the market. More than 73% of purchases benefited from Italy’s first-home tax relief, a higher proportion than in previous quarters. Mortgage-backed purchases also grew, accounting for 47% of all transactions—over three percentage points more than last year. This shift comes despite rising interest rates, which have reached an average of 3.35%.
New-build homes: a contrasting picture
Newly built homes represented around 6% of all residential sales—a notable decline of 9.6% compared with the same period in 2024. Conversely, demand for existing properties remained robust, with transactions increasing by 10%.
Italy’s major cities: Milan leads the way
Italy’s biggest cities generally mirrored the national upward trend, with sales rising by 6.2% overall. Milan stood out as the strongest performer, recording a remarkable 12% increase and confirming its position as one of the country’s most dynamic real estate markets. Palermo followed with an 8.5% rise.
Rome (+6.4%), Turin (+6.5%), and Naples (+6%) all posted solid growth, while Genoa remained stable (+0.2%). Bologna and Florence were the only cities to register a slight downturn.
Rome recorded the highest share of first-home incentive purchases (+85%), while Milan registered the largest proportion of new-build acquisitions (9.5%).