The upscale housing sector is set to restart operations in 2026, with prices projected to surge more rapidly than rental rates.

As per Savills' research, the worldwide luxury residential market might witness a stronger upturn in 2026, anticipating a quicker escalation in premium property values compared to rents. Following a period of deceleration, the industry is gradually rebounding due to robust demand, restricted supply, and renewed investor enthusiasm. In Italy, the dynamics vary across cities, with Milan and Rome displaying divergent patterns influenced by local elements such as new construction volume, availability of high-quality properties, and urban appeal.

Upswing in the global luxury real estate market

After a relatively subdued 2025, where prime real estate prices in major global cities saw an average growth of about 1.8%, a resurgence was evident in the latter half of the year. For the first time since 2021, housing price growth outpaced rental rate increases. Experts attribute this trend to the gradual restoration of buyer and investor confidence, despite existing economic and geopolitical uncertainties.

Key cities: Asia and Southern Europe

Substantial growth is anticipated in several international metropolitan areas. Seoul and Tokyo stand out due to high international demand coupled with a scarcity of luxury properties. Madrid and Lisbon maintain their allure in Europe due to relatively affordable prices and foreign investor interest. Cape Town is also noteworthy, drawing buyers with a quality lifestyle and reasonably priced real estate.

Forecasts suggest that these cities could witness premium housing price hikes exceeding 4% in 2026, well above the global average.

Europe and the USA: A Prudent Outlook

Most European capitals are expected to see modest growth, below 2% annually. Paris and Athens are observing gradual recoveries, supported by limited supply. London and Berlin are likely to maintain stable performance without significant fluctuations.

In the USA, the scenario varies. New York City is experiencing moderate growth, while Miami, Los Angeles, and San Francisco may witness price corrections due to high property values and cautious buyer behavior. Conversely, Chinese cities in the index continue to record price declines.

Italy: Prudent Stability

The Italian luxury property market is anticipated to exhibit restrained growth in 2026. Prices in Milan and Rome are projected to rise by no more than 1.9%.

Milan: Deceleration in the High-End Sector

Milan's luxury real estate market is undergoing a cooling phase. A scarcity of premium properties and reduced buyer activity have led to price stabilization. Some demand has shifted towards rentals, particularly from students and young professionals. Nonetheless, limited housing supply continues to impede market growth. A resurgence in activity in 2026 is feasible primarily due to the emergence of new, albeit modest, residential projects.

Rome: Increased Market Activity due to the Jubilee

The outlook for Rome appears more optimistic. Demand in central areas is bolstered by the Jubilee 2025, contributing to active buying and selling. Properties priced up to one million euros are moving swiftly, while demand still outstrips supply in the higher price segment.

Rental rates are also climbing, although the rental market is constrained by the lack of new housing. Future momentum in the premium segment could stem from new development initiatives and rising interest from institutional investors, particularly in the build-to-rent model.