Properties in the housing sector give a 6% rate of return, a 4-year high / Gtres
Properties in the housing sector give a 6% rate of return, a 4-year high / Gtres

According to a study carried out by idealista, real estate investment in Italy is increasingly profitable, with the returns on renting out both residential and commercial property rising across the board. This is the case even as returns on Buoni del Tesoro Poliannuali government bonds (10-year BTPs) rise to 3.4%.

The analysis, which researches the correlation between the sale and rental prices of the different types of real estate to calculate their gross return, shows increases in all property segments compared to 12 months ago. The rental yield is understood as gross taxes (Imu and 'dry coupon' taxes) and management costs.

The biggest increase was made by properties in the commercial sector (shops and stores), which went from a profitability of 7.9% to 8.6%. Offices rose from 7.1% to 7.7%, while homes and garages achieved yields of 6% and 5.3%, respectively.

Profitability in the residential sector

With a yield rate of 8.8%, Biella is the most profitable city in Italy to invest in residential property, followed by Vicenza (7.9%), Taranto and Macerata, both at 7.7%. On the other hand, Siena, Venice and Imperia, with 4.1%, are the least profitable cities for their owners.

Among the large markets, Milan and Turin offer returns above the national average of 6.4%. Rome stands at 5.2%, while Naples closes the list with 4.6%.

Yields from business premises (not including warehouses)

The highest expectations for property owners remain linked to returns in the retail sector, which has recorded the highest positive correlation between real estate products compared with the same period last year.

Milan ranks first among the centres with the highest rates of return, with a rate of 15.2%, followed by Genoa (15%) and Trieste (13%). 19 other cities in Italy show double-digit returns ranging from 12.6% in Rome to 10% in Verona. At the lower end of the ranking are Pisa (7.4%), Savona (7.5%) and La Spezia (7.8%).

Returns on offices

The highest yields in the office sector were recorded in Ravenna (7.9%) and Verona (7.8%). Pescara, Rimini and Pesano offer the least attractive returns among the centres surveyed, with returns of 5.4%. Among the large markets, Milan (7.1%) performed better than Rome (6.4%).

Profitability of parking spaces and garages

Carparks are always the least profitable product for real estate investors in almost all markets. In Naples (3.2%) the performance of this category of real estate is lower than 10-year bonds. Of the 11 cities monitored by idealista’s report, Florence (8.7%) is the best place for those who invest in a garage to make a profit, ahead of Monza (5.9%) and Palermo (5.7%). Meanwhile, Milan (5.6%) and Rome (4.7%) are growing is comparison with a year ago.

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