Italy Forecasts +8.4% Growth in Real Estate Market by 2026

Italy's Real Estate Market Set for +8.4% Growth by 2026

Italy is poised to lead Europe's real estate market with an anticipated turnover growth of +8.4% by 2026. This growth is driven by an expected 750,000 residential transactions in 2025, marking a 5% year-over-year increase. Average property prices are projected to rise by 3.1-3.3% to €2,139 per square meter. Transaction fees are also expected to climb by 6.4%, further reflecting the robust market activity. The Cushman & Wakefield report highlights that this upward trend is largely fueled by increased activity in the residential sector, which accounts for 83% of the market, along with notable growth in hospitality and office spaces driven by infrastructure developments related to the upcoming Milan Olympics.

Residential Transactions to Exceed 750,000 in 2025

According to the latest data, residential transactions in Italy are projected to surpass 750,000 in 2025, representing a significant 5% year-on-year increase. This expansion is indicative of the country's recovering economy and a renewed interest in the housing market. The Italian Real Estate Company notes that this growth is driven by domestic and international buyers seeking investment opportunities in Italy’s varied landscapes, from the urban residences of Milan and Rome to the picturesque countryside homes. The increase in transactions is expected to provide a boost to associated industries, including construction and real estate services.

Milan and Rome to Lead with Price Increases of +7.3% and +6.8%

The cities of Milan and Rome are forecasted to be at the forefront of property price increases, with Milan seeing a peak growth of +7.3% and Rome at +6.8%. These cities are benefiting from robust demand driven by their status as cultural and economic hubs, as well as ongoing infrastructural improvements. According to Circolo B2B, the Milan Olympics infrastructure developments are a significant factor in driving up property values, as they enhance the city's appeal to investors and residents alike.

Residential Sector Dominates 83% of the Italian Market

The residential sector continues to dominate the Italian real estate market, comprising 83% of total transactions. This dominance is bolstered by a strong domestic demand and growing interest from international investors. The focus on residential properties reflects a broader trend of urbanization and the attractiveness of Italy's diverse locales. Idealista emphasizes that the surge in demand is also supported by favorable mortgage rates and a stable economic recovery post-pandemic.

Impact of Milan Olympics on Real Estate Development

The upcoming Milan Olympics has provided a substantial boost to Italy's real estate sector, particularly in Milan. The city's infrastructure improvements, including better transportation and new commercial spaces, are attracting both domestic and foreign investors. As per Cushman & Wakefield, these developments are expected to sustain increased property values and stimulate further investments in hospitality and office sectors, positioning Milan as a key international destination.

Future Implications for Investors in Italy's Real Estate Market

Looking forward, Italy's real estate market offers promising opportunities for investors. The projected growth in transactions and prices suggests a stable investment environment with potential for lucrative returns. According to RealEstateAbroad.com analysis, investors are advised to consider long-term strategies focusing on regions benefiting from infrastructural developments, such as Milan and Rome. Moreover, the slight increase in mortgage rates remains favorable, inviting more buyers into the market. An emphasis on sustainable practices and energy-efficient buildings is also likely to gain traction, aligning with broader European environmental goals.

• Focus on Milan and Rome for investment opportunities.
• Consider entering the market ahead of the 2026 turnover peak.
• Evaluate properties in proximity to new infrastructure projects.