Rent Trends: Which Cities Are Growing the Quickest?

The upward trajectory of rental prices in Italy remains ongoing. As per the latest study by the Tecnocasa Group Research Centre, rents have notably risen in the first half of 2024 compared to the latter part of 2023. Specifically, one-bedroom apartment rents have surged by 3.9% , two-bedroom apartments by 4.0% , and three-bedroom apartments by 3.0% . These figures affirm the resurgence of the rental market, fueled by robust demand yet hampered by a scarcity of offerings, particularly in the long-term rental sector.

Decline in Short-Term Rentals

Increasingly, landlords are favoring short-term fixed-rate lease agreements, which they perceive as more beneficial and adaptable. Concurrently, certain urban areas like Milan are witnessing a decrease in short-term leasing. Many property owners are reverting to traditional rental arrangements, somewhat decelerating the rental price escalation in Milan, where rates have already soared to exorbitant levels beyond the means of most residents.

In Milan, lease agreements are now starting to be finalized at a negotiated rate, following a reassessment of benchmark values by municipal authorities.

Cities Experiencing the Most Rapid Rent Growth

The surge in rental rates is not exclusive to Milan but is evident across major Italian cities. Cities such as Bari , Bologna , and Rome are particularly witnessing substantial price hikes, partly fueled by the heightened demand for short-term rentals.

In Rome, for instance, the upcoming Jubilee Year and the anticipated tourist influx are prompting landlords to forego long-term lease renewals in favor of more lucrative short-term options.

Nevertheless, Milan remains the priciest city for renting: the average rate stands at €820 for a one-bedroom apartment, €1,140 for a two-bedroom apartment, and €1,510 for a three-bedroom apartment. In provincial towns, prices are also on the ascent: one-bedroom apartment rents have risen by 2.7% , two-bedroom apartments by 2.4% , and three-bedroom apartments by 2.5% .

Demand persists, especially for quality residences. The focus is on well-appointed apartments situated in locales with developed infrastructure and ample natural light. Concurrently, the maintenance costs of a property significantly influence housing choices, emerging as a pivotal aspect for tenants.

Reasons for Opting for Rental Accommodation

In the initial semester of 2024, 69.3% of renters were seeking permanent housing. This percentage slightly dipped from 70.1% during the same period the previous year. This tenant category encompasses individuals unable to purchase a home and those consciously selecting to rent for enhanced flexibility or convenience.

Meanwhile, the proportion of individuals renting for work purposes grew from 24.9% to 26.0% . Demand from student renters decreased from 5.0% to 4.6% .

Varieties of Rental Contracts in Italy

An analysis of data for the initial half of 2024 reveals a rise in short-term fixed-rate leases, climbing to 26.2% from 25.4% a year earlier. There was also a slight uptick in negotiated-rate leases, from 30.1% to 30.3% .

These alterations suggest that, notwithstanding market tensions and challenges, the sector is gradually adapting to the diverse demands of lessees.