Italian Property Market: Price Increase and Shifting Demand

Research from the Real Estate DATA HUB indicates a transition to a more developed stage in the Italian property market. Key drivers of growth include the energy efficiency of homes, the rising appeal of southern regions, and the increasing interest in larger residential spaces among buyers.

While many European nations are cautious in investments, Italy concluded 2025 with remarkable outcomes: a 9.5% rise in residential real estate transactions, a 3.5% price surge from the previous year, and an average property selling time of around 150 days. These findings are detailed in the thirteenth Real Estate DATA HUB report, jointly compiled by REMAX Italia, RYZE, and 24MAX.

Predictions for 2026

Experts anticipate continued growth in the market for 2026, albeit at a more moderate pace, supported by stable fundamentals. Buyers prioritize housing quality, energy efficiency, and long-term value retention.

According to Dario Castiglia, CEO of REMAX Italia, the Italian property market is maturing, with demand remaining high despite increased property standards, as real estate is considered a reliable and strategic asset.

Rise in Value and Faster Sales of Energy-Efficient Homes

Energy efficiency is now a significant economic factor, not just an environmental trend. Sales of Class A and B energy-rated properties surged by over 25% in 2025 compared to two years ago.

While these properties command roughly 40% higher prices on average, they sell faster, with market exposure about 8% shorter than the norm.

Growing Attraction of "Green" Mortgages

The banking sector offers additional incentives, with fixed rates on "green" mortgages for energy-efficient homes dropping to around 2.19% in the latter half of 2025.

Monthly payments on these loans are approximately 15% lower than standard mortgages, making energy-efficient homes appealing not only environmentally but also financially.

Southern Italy Emerges as a New Growth Hub

A notable trend in 2025 was the strengthening of southern Italy and the islands. While growth stabilizes in the north and center, the south shows the most promising results.

Factors such as affordable property prices, the rise of remote work, and future housing appreciation prospects contribute to this shift. Experts view this as a long-term market trend, with tax benefits and a high quality of life drawing young buyers to these regions.

Preference for Larger Homes

Though three-bedroom units remain popular, demand is shifting towards more spacious properties, with four-room homes and larger accounting for nearly 38% of the market.

This change in preference is evident in the central and southern regions, where larger properties are more affordable, driving transaction shares for four-room and larger homes in those areas.

Commercial Real Estate: Emphasis on Urban Revitalization

The commercial property sector saw record growth in 2025, with a shift towards using office spaces, retail properties, logistics hubs, and hotels for economic development and urban renewal.

Retail Sector

Retail property investment surged by 46% from 2024, focusing on properties outside city centers. Concepts like "experience centers" combining shopping and entertainment are gaining traction, with outlets and modern shopping centers attracting the most interest.

Hotel Industry

The hotel sector experienced a 20% growth, particularly in value-add projects converting old buildings into high-end hotels. This strategy addresses property inefficiency and meets the demand for quality tourism services.

Rome Closing the Gap with Milan

Logistics real estate attracted €2 billion in investments, with foreign investors contributing 98%. Energy efficiency, environmental considerations, and asset quality remain crucial criteria, with Rome's market expanding to rival Milan's rates.

Office Space: Rising Demand, Lower Supply

Office property investments decreased by 14% in 2025 to around €1.8 billion. However, demand for Grade A properties with ESG certification in prime locations remains strong, impacting vacancy rates and property values.

Laura Piantanida from RYZE highlights the market's selectivity, favoring sustainable, innovative, and flexible properties. Renovation projects are key to value creation, differentiating successful assets from those struggling to meet market demands.