The Italian rental market: rate growth is slowing, but supply shortage remains

In the second half of 2025, the long-term rental market for residential real estate in Italy remains one of the most active segments, although the rate of growth of rental rates is gradually beginning to slow after several years of rapid growth. According to a study by the Tecnocasa Group analytical center, compared to the previous half of the year, average rental rates in the country's largest cities increased by 2.2% for studios, by 2.3% for two-room apartments, and by 2.2% for three-room apartments. Thus, the market continues to grow, but the dynamics are no longer as intense as before.

Demand remains high, but supply remains limited

Stably high demand is generated by several categories of tenants at once. First of all, these are buyers who are unable to purchase housing due to difficulties in obtaining a mortgage. Furthermore, the number of people consciously choosing to rent rather than buy is growing. A significant share of demand is also driven by citizens relocating to other cities for work or education.

The trend toward an increasing number of international students choosing Italian universities is becoming particularly noticeable. More and more young people from abroad are entering the rental market, further increasing demand for housing in the country's major educational centers.

However, supply still fails to keep pace with growing market demand. One of the main reasons remains the caution of homeowners, many of whom prefer not to rent out their apartments for fear of nonpayment by tenants. As a result, a significant portion of the housing stock remains vacant.

The short-term rental market is adding pressure. While the impact of the tourism segment has diminished somewhat in major cities, short-term rentals continue to grow rapidly in popular tourist destinations, reducing the amount of housing available for long-term renters.

Where rents are rising fastest

Rent growth varies significantly by city.

The most significant increase was recorded in Palermo. Here, studio rental prices increased by 8.7%, two-room apartments by 4.9%, and three-room apartments by 4.8%.

High growth rates are also observed in Genoa, where rates increased by 6.6%, 4.8%, and 3.9%, respectively.

In Turin, the market is also showing positive dynamics: studio rental prices increased by 1.9%, two-room apartments by 4.3%, and three-room apartments by 3.5%.

A completely different situation is developing in Milan and Bologna. In the second half of 2025, stagnation or a slight decrease in rates is observed here.

In Bologna, rent has become cheaper in all categories of housing:

• studios - by 1.5%;
• two-room apartments - by 0.6%;
• three-room apartments - by 1.1%.

In Milan, the cost of renting studios has remained virtually unchanged, two-room apartments have fallen in price by 0.7%, and three-room apartments have increased only 0.2%.

At the same time, analysts emphasize that the reason for the slowdown is not weakening demand, but an extremely high price level. Today, the average rent in Milan is about 840 euros per month for a studio, 1,130 euros for a two-room apartment and 1,525 euros for a three-room apartment. According to Tecnocasa, such values are already approaching the limit of the financial capabilities of most tenants.

Rome, Florence and Naples continue moderate growth

In Rome, rental rates continue to increase relatively evenly:

• studios - by 2%;
• two-room apartments - by 1.9%;
• three-room apartments - by 2.2%.

The average rental price here is 725, 950 and 1,210 euros per month, respectively.

In Florence, the dynamics are similar: growth is in the range of 1.6% to 2.6%, and average rates reach 700 euros for a studio, 880 euros for a two-room apartment and 1,060 euros for a three-room apartment.

In Naples, the situation is less uniform. The most significant increase was in the rental prices of studios (+2.4%) and three-room apartments (+2.1%), while two-room apartments increased in price by only 1.2%. Average rates here range from 530 euros for a studio to 910 euros for a three-room apartment.

In Verona and Bari, positive dynamics are also maintained, although the growth rate remains moderate and varies depending on the type of housing.

Regional administrative centers follow the national trend

In the administrative centers of the provinces, the market is developing according to the same scenario as in the largest cities, although growth is somewhat slower.

In the second half of 2025, rental rates here increased:

• by 1.9% for studios;
• by 2.7% for two-room apartments;
• by 2.4% for three-room apartments.

At the same time, the rate of increase was also lower than in the previous half of the year, which indicates a gradual stabilization of the market.

Students are increasingly influencing the structure

Changes are also noticeable in the structure of lease agreements being concluded.

The majority of transactions—59.3%—are still with tenants renting for permanent residence. However, a year earlier, their share was 60.2%, indicating a slight decline.

The student rental segment is growing fastest. The share of contracts concluded by students increased from 11.1% to 14.1%, confirming the growing trend in the number of international students coming to study in Italy.

At the same time, the share of contracts with flexible rent formation increased from 38.9% to 39.5%, while the number of short-term (transitional) contracts remained virtually unchanged at 33.4%.

The time it takes to find tenants is gradually increasing.

Another indicator of changes in the market was the increase in the average rental period.

While a year ago it took an average of 31 days to find a tenant for an apartment, now this figure has risen to 34 days.

Although the difference seems small, in the context of a persistent supply shortage, it indicates that potential tenants are becoming more cautious when choosing housing. Experts cite high rental rates as one of the main reasons for this selectivity, which forces residents to more carefully evaluate the price-quality ratio of the properties on offer.