Italian Real Estate Market: Price Growth and Changing Demand

Real Estate DATA HUB research shows that the Italian real estate market is entering a more mature phase of development. The main growth factors are the energy efficiency of housing, the increasing attractiveness of the southern regions of the country, and the growing interest of buyers in more spacious houses and apartments.

While many European countries remain cautious in investments and pay increased attention to asset quality, Italy ended 2025 with impressive results: the number of transactions in the residential real estate market increased by 9.5%, prices increased by 3.5% compared to the previous year, and the average time to sell a property was around 150 days. These data are presented in the thirteenth edition of the Real Estate DATA HUB report, prepared by the analytical departments of REMAX Italia, RYZE and 24MAX.

Forecasts for 2026

Experts expect the market to continue growing in 2026, although the pace of growth will be more moderate. It will be supported by stable fundamental factors. For buyers, the quality of housing, its energy efficiency and the ability to retain value in the long term are of key importance.

According to REMAX Italia CEO Dario Castiglia, the Italian housing market is becoming more mature and conscious. Despite the increased requirements for properties, demand remains high, as real estate is still perceived as a reliable and strategically important asset.

Energy-efficient housing is gaining in price and selling faster

Energy efficiency has ceased to be solely an environmental trend and has become an important economic factor. In 2025, sales of properties with energy classes A and B increased by more than 25% compared to two years ago.

The price of such properties is, on average, approximately 40% higher than that of housing with low energy performance. However, they sell faster: the period of exposure on the market is approximately 8% shorter than average.

"Green" mortgages are becoming more profitable

The banking sector provides additional incentive. In the second half of 2025, fixed rates on so-called "green" mortgages intended for the purchase of energy-efficient housing dropped to approximately 2.19%.

Monthly payments on such loans are on average 15% lower than on standard mortgage programs. Combined with lower property maintenance costs, this makes energy-efficient housing attractive not only from an environmental but also a financial perspective. In addition, European energy efficiency requirements are already having a noticeable impact on buyer behavior.

Southern Italy is becoming a new growth center

One of the most notable developments of 2025 was the strengthening of the positions of the southern regions of Italy and the islands. While the north and center of the country are showing stabilization in growth rates, the south has shown the best results over the entire observation period.

Several factors contribute to this: relatively affordable real estate prices, the growing popularity of remote and hybrid work, and good prospects for future housing appreciation.

Experts believe that this is not a short-term blip, but a long-term change in market trends. Tax incentives, a high quality of life, and more affordable prices compared to the central and northern regions are attracting young buyers who see significant potential in these areas.

Buyers are choosing more spacious housing

Three-bedroom apartments remain the most popular type of housing in the country, accounting for 37.35% of demand. However, buyer preferences are gradually shifting toward more spacious properties.

Today, four-room apartments and houses or apartments with five or more rooms together account for almost 38% of demand. This reflects changing perceptions of housing: a home should simultaneously serve as a place for relaxation, work, sports, study, and socializing.

This trend is especially noticeable in the central and southern regions. In central Italy, four-room properties account for approximately 20% of transactions, while in the south, they account for 27%. Homes with five or more rooms reach a share of 22% in the center of the country and 30% in the southern regions. This is largely due to the fact that expanding residential space here remains more affordable.

Commercial Real Estate: Focus on Urban Renewal

The commercial real estate segment ended 2025 with record figures. However, the main feature was not only the investment dynamics, but also the qualitative change in the market.

Office real estate, retail properties, logistics complexes, and the hotel sector are increasingly viewed as tools for economic development and urban renovation.

Retail

The retail real estate sector grew by 46% compared to 2024, reaching a historical maximum. The bulk of investment went to properties outside city centers, which accounted for about 80% of all transactions.

The concept of "experience centers," which combine shopping, entertainment, and gastronomy, is gaining popularity. Investors are most interested in outlets, premium shopping streets, and modern shopping centers.

Hotel Business

The hotel sector was the second fastest growing, increasing by 20%. Value-add projects, which involve the reconstruction of old offices and historic buildings and their conversion into high-class hotels, proved to be particularly popular.

This strategy allows us to simultaneously address the problem of inefficient properties and meet the growing demand for a high-quality tourist product. A significant portion of investment is directed towards the premium and luxury segments.

Rome narrows the gap with Milan

Logistics real estate attracted approximately €2 billion in investment, up 30% from the previous year. Almost the entire financing volume – 98% – was provided by foreign investors.

Energy efficiency, environmental friendliness, and high asset quality remain the main criteria for selecting properties. At the same time, the logistics market is gradually expanding beyond the traditional dominance of Milan: rental rates in the Rome area are increasingly approaching Milanese levels. Data centers, which form a separate, fast-growing segment, are providing additional impetus to development.

Office Market: Lower Volumes, Higher Demands

Office real estate investment fell by 14%, amounting to approximately €1.8 billion. However, the decline in volumes does not reflect the full picture of events.

The "flight-to-quality" trend is strengthening in the market—concentrating demand on the highest-quality Grade A properties with ESG certification, located in central business districts. The vacancy rate for such properties remains extremely low: around 3% in Milan and just 1.6% in Rome.

As a result, owners of modern and sustainable properties enjoy steady demand and can command a price premium, while lower-quality properties are gradually losing their competitiveness.

According to Laura Piantanida, Head of Institutional Relations at RYZE, the market is becoming increasingly selective. Investors and tenants prefer properties that combine high quality, sustainability, innovative solutions, and flexibility of use. Renovation and reimagining projects for existing buildings are currently the main source of value creation, widening the gap between the most attractive assets and properties that are failing to adapt to new market demands.