Italian property market: uptick in sales and prices seen in 2025

The Italian property sector concluded 2025 with encouragingly positive outcomes, signaling a period of stability following recent uncertainties. As per an analysis by Gruppo Tecnocasa, the residential domain is witnessing a noticeable surge in transactions, escalating prices, and a still vibrant rental market, albeit with a slightly decelerating growth rate.

Consequently, the Italian real estate market steps into 2026 on a relatively robust footing, despite the persistent imbalance between high demand and restricted supply.

Over 766 thousand transactions: growth fueled by small towns

In the course of 2025, Italy registered 766,756 transactions for buying and selling residential properties, marking a 6.4% increase from the previous year.

The most significant growth was observed in small towns and municipalities outside urban centers (+6.9%), while major cities also demonstrated a confident performance - +5.4%.

The market composition is particularly notable: the sales volume of new constructions declined by 21%, whereas the secondary market expanded by 9.1%. This trend suggests that the scarcity of new housing and elevated construction costs are progressively redirecting demand towards existing housing inventory.

Price surge: Bari leads, Milan and Rome show steady growth

In the latter half of 2025, there was an average price increase of 2.6% in housing across major cities - the highest figure post-pandemic.

The most dynamic growth was witnessed in Bari (+6.3%).

Additionally, positive growth trends were observed in:

• Milan - +2.2%;
• Rome - +2.2%.

It is noteworthy that not a single major city experienced a price decrease, underscoring market stability.

Favorable trends are also visible in provincial centers (+1.7%) and suburban areas (+2.2%). Notable mentions among provincial cities include:

• Florence (+4.0%);
• Bologna (+2.8%).

Despite a decrease in construction volumes, the price of new constructions rose by 2.5%.

Sales durations stable, with city-specific variations

As of January 2026, the average selling duration for real estate in major cities stands at 108 days - nearly unchanged from the previous year.

The most active markets are:

• Milan - 88 days;
• Bologna - 91 days.

Conversely, the longest selling durations were recorded in:

• Genoa - 133 days;
• Bari - 126 days.

The scenario is gradually improving in peripheral areas: the average duration decreased from 142 to 136 days.

Supply and demand: three-bedroom apartments remain popular

Three-bedroom apartments (trilocale) remain the favored housing type in major cities, constituting 41.2% of demand.

Followed by:

• Two-bedroom apartments (bilocale) - 24.9%;
• Four-bedroom apartments (quadrilocale) - 22.3%.

However, demand structure varies by city:

• In Milan, two-bedroom apartments take the lead (45.1%);
• In Genoa, four-bedroom apartments dominate (43.6%), facilitated by a more affordable price range.

Supply remains constrained, particularly in the segment of quality housing in good condition.

Demographics of property buyers

According to the study:

• 75.2% of purchases are for personal residence;
• Investment purchases comprise 17.9%.

The average buyer age is 43.3 years. Notably, both young buyers aged 18-34 and the 55-64 age group show increased activity. More individuals are purchasing homes outside their city of residence.

Rental market: growth moderates, yet demand remains strong

The rental market continues to face supply shortages, although the rate of rental price growth is gradually slowing down.

In the latter half of 2025:

• Studios and three-bedroom apartments saw a rent increase of 2.2%;
• Two-bedroom apartments - by 2.3%.

Milan and Bologna are witnessing a slight market cooldown after years of rapid growth, with Genoa and Palermo recording the highest rental price growth.

Milan still boasts the highest rental rates:

• €837 - studio;
• €1,128 - two-bedroom apartment;
• €1,525 - three-bedroom apartment.

An interesting trend is the reintegration of some properties previously used for short-term rentals into the long-term market, slightly easing the supply.

Student rental agreements are on the rise - accounting for 14.1%, while agreements at market rates make up 39.5% of the market.

The average gross rental yield for a two-bedroom apartment reaches 5.7% annually.

2026 Forecast: Moderate growth amidst ongoing uncertainties

Expectations for 2026 remain optimistic. Analysts anticipate:

• Between 780 to 790 thousand purchase and sale transactions;
• A housing price increase of 1-3%;
• Rental rate growth of 3-5%.

Nevertheless, the market remains susceptible to international geopolitical conditions, which could impact consumer confidence, investor sentiment, and overall demand levels.