Housing market in Italy: what’s the picture for the biggest cities?

9 January 2019, Redaction

Property sales increased in major Italian cities in the first nine months of 2018, according to data from the research centre Centro Studi di Abitare Co., which analysed trends in the real estate market for new homes in the main Italian metropolitan cities (Rome, Milan, Turin, Naples, Genoa, Florence, Bologna and Palermo).

Residential housing transactions on the rise

According to the study, in the first three quarters of the last year, home sales and purchases in Italy rose by 2.3% on 2017, driven by the sale of new homes (+9.4%), with supply of this typology reaching an average of 12% of the total residential market in 2018. In this last aspect, the shares range from 4.4% in Palermo to 25% in the livelier city of Milan. Furthermore, only in this segment did sales prices start growing again (+1.3%), given that for second-hand homes and properties in need of renovation, 2018 also showed a negative performance (-0.2%).

Faster sales times

In terms of used houses, sales times were much faster than in the previous year (4.9 months compared with 6.5). Moreover, in large cities such as Milan and Rome, beyond the home itself, more attention is paid to custom-made, personalised housing solutions with innovative services ranging from a personal architect to the concierge as if living in a luxury hotel, right up to the cookery service with chefs available to make dinner for homeowners in their new house.

Naples is the city with the most trades

Among the individual metropolitan cities, according to Abitare Co.'s analysis, the most dynamic housing market in Italy in 2018 was Naples, which saw an increase in new house sales of +15.2%, followed by Milan (+14.5%), Rome (+13%), Turin (+11.3%) and Bologna (+9.7%). Sales also grew, albeit at a lesser rate, in Genoa (+5.5%), Florence (+3.2%) and Palermo (+2.6%).

With regard to the amount of supply, in 2018 the highest growth rate was seen in Milan (+5.4%) and Rome (+3.2%), and the promising times the real estate market is experiencing is also reflected in the house prices. For new builds alone, there are signs of reawakening in all Italy’s metropolitan cities (on average +1.3% more than 2017), with Milan confirming that it is still the best performing city (+3.3%).

Real estate prices in Milan increase by 3.3%

The average price per square metre to buy a new house in Italy is 4,500 euro. The three most expensive cities, all with prices above the national average, are Milan with 6,750 euro (+3.3% on 2017), Rome with 6,300 euro (+1.2%) and Florence with 4,800 euro (+0.8%). After them come Turin with 4,450 (+2.3%), Naples with 3,800 (+1.2%), Bologna with 3,700 (+0.7%), Genoa with 3,300 (+0.6%) and Palermo with 2,900 (+0.4%).

Compared to previously owned houses, prices on the market for new homes are 24% higher, with peaks in Palermo of 28%. Meanwhile, it’s estimated that it takes an average of 4.9 months to sell a new house in Italy (compared with 6.5 months for the properties), but once again the most dynamic market is found in Milan with 3.7 months.

Italian real estate market: 2019 predictions

What are the prospects for the coming months? The forecasts are positive: "The residential real estate market for new buildings has confirmed its positive cyclical trend in 2018,” says Alessandro Ghisolfi, Head of the Centro Studi di Abitare Co. “In comparison to the demand, today the supply is still very underestimated, and this encourages a shortening of sales times that up until three years ago were unthinkable. For 2019, the signs remain positive even as we remain cautious given the current economic situation."

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