Published on and written by Cyril Jarnias
The Italian real estate market is currently experiencing a period of dynamism and transformation, offering numerous opportunities for savvy investors. Between booming neighborhoods, evolving prices, and the most promising property types, let’s dive into the heart of the trends shaping the peninsula’s real estate landscape.
Neighborhoods That Make Italy Vibrate: Hidden Gems to Discover
Italy is full of trendy sectors that are increasingly attracting the attention of investors and buyers. Among the most sought-after areas are:
NoLo (North of Loreto) in Milan: This neighborhood, once little known, has become one of the most attractive in the Lombard capital. In just 5 years, real estate prices there have climbed by 64.7%, a spectacular increase that demonstrates its growing appeal. The restructuring of old buildings played a major role in this appreciation, with a staggering 94% increase in prices for these renovated properties.
Forlanini-Mecenate in Milan: This sector has experienced an impressive growth of 58.6% in 5 years, mainly due to the opening of the Milan metro’s blue line. This improvement in accessibility has significantly enhanced the area’s appeal.
Lagosta-Garibaldi in Milan: With a price increase of 57.8% in 5 years, this neighborhood benefits notably from a boom in new-build property sales, which have increased by 79%.
Puglia: This region in southern Italy is increasingly attracting the attention of international investors. Offering excellent value for money, it captivates with its enchanting landscapes and growing tourism potential.
Tuscany: Still highly sought after, Tuscany continues to attract foreign buyers, particularly for its luxury villas and charming properties. Cities like Florence and San Vincenzo remain safe bets for high-end real estate investment.
Good to Know:
The outlying neighborhoods of major Italian cities, particularly in Milan, are experiencing a spectacular growth in real estate prices. This trend is explained by infrastructure development and the gentrification of these once less sought-after areas.
Price Evolution: A Contrasting Dynamic Depending on the Region
The evolution of real estate prices in Italy shows significant disparities depending on the regions and property types:
The North, Engine of Growth: The northern regions, particularly Lombardy with Milan at the forefront, show the strongest price increases. In Milan, some neighborhoods have seen their prices rise by over 50% in 5 years.
The Center and South, More Stable Markets: The central and southern regions are experiencing a more moderate price evolution, still offering interesting investment opportunities.
Major Cities vs. Rural Areas: Metropolises like Milan, Rome, or Florence record more significant price increases than rural areas or small towns.
Luxury Still Rising: The luxury segment, particularly in the historic neighborhoods of major cities and popular tourist destinations, continues to see its prices increase. In Milan, in the fashion quadrilateral, prices reach an average of €20,000 per m².
New vs. Old: Over the last five years, the price of new real estate has increased by 37.3%, restructured real estate by 34.8%, and old real estate needing renovation by 43%.
- In Milan’s historic center, the increases are more moderate: Brera (+14.3%), Parco Sempione-Castello (+14.9%), Duomo neighborhood (+18.5%).
- In Venice, forecasts for 2024-2025 announce a growth in sales prices of 6.5%, just behind Milan (6.9%).
Good to Know:
Despite a general upward trend, price evolution in Italy remains heterogeneous. Investors must pay attention to local specifics and the development potential of each area to make the best investments.
Properties to Target: Which Types of Properties to Prioritize?
To make a wise investment in the Italian real estate market, it is crucial to choose the right type of property. Here are the properties that seem the most promising:
Apartments in Developing Neighborhoods: In areas like NoLo in Milan, investing in an apartment to renovate can prove very profitable. The growing demand and appreciation potential are significant.
Villas with Pools in Tourist Regions: In Puglia for example, a villa with a pool of 150 to 200 m² can be acquired for between €350,000 and €480,000, offering excellent seasonal rental potential.
Prestige Properties in Historic Centers: In Florence, luxury apartments with views of iconic squares like Piazza del Carmine can constitute prime investments, with prices around €2,000,000 for 170 m².
Seaside Properties: In seaside resorts like San Vincenzo in Tuscany, apartments with sea views are highly sought after, particularly for seasonal rentals.
Country Houses to Renovate: In regions like Tuscany or Umbria, purchasing and renovating country houses can offer excellent opportunities, both for personal use and tourist rentals.
- Apartments represent 29.77% of purchases by foreigners, followed by villas (17.56%) and single-family homes (6.87%).
- 64.89% of foreign buyers are looking for fully renovated properties.
- 64.12% are interested in properties larger than 120 m².
- The most requested price range is between €500,000 and €1 million (23.66% of preferences).
Good to Know:
Properties offering seasonal rental potential, particularly in tourist regions, are especially interesting for investors. The growing demand for quality rentals allows for attractive returns.
Outlook and Opportunities: An Ever-Evolving Market
The Italian real estate market offers promising prospects for the coming years, despite certain challenges:
Post-Pandemic Recovery: After a period of slowdown due to the health crisis, the market is showing encouraging signs of recovery, particularly in major cities and tourist areas.
Attractiveness for Foreign Investors: Italy remains a prime destination for international buyers, attracted by the country’s lifestyle, culture, and heritage.
Infrastructure Development: Investments in transportation and urban development, like the new metro line in Milan, continue to enhance certain neighborhoods.
Renovation Potential: The old real estate stock offers numerous opportunities for renovation and appreciation, particularly in historic centers.
Dynamic Rental Market: The growing demand for rentals, both long-term and seasonal, offers interesting prospects for investors.
Good to Know:
The diversity of the Italian real estate market allows for finding opportunities suited to different investor profiles, whether for a rental investment, a second home, or a renovation project.
Conclusion: A Market Rich in Opportunities
The Italian real estate market is characterized by its diversity and dynamism. Between the booming neighborhoods of major cities, the charming properties in the countryside, and the prestige properties in tourist destinations, opportunities are numerous for savvy investors.
The key to success lies in a thorough analysis of local trends, an understanding of the specifics of the Italian market, and a long-term vision for the investment. Whether you’re looking for rental yield, resale capital gain, or simply a pied-à-terre in one of the world’s most beautiful countries, Italy certainly has something to offer you.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
