Rents: Which Cities Are Growing the Fastest?

The upward trend in rental rates in Italy continues. According to the latest research conducted by the Tecnocasa Group Research Centre, rents have increased significantly in the first half of 2024 compared to the second half of 2023. In particular, rents for one-room apartments have increased by 3.9% , two-room apartments by 4.0% and three-room apartments by 3.0% . These data confirm the revival of the rental market, driven by strong and robust demand, which, however, is facing a shortage of supply, especially in the long-term rental segment.

Reduction in short-term rentals

Increasingly, property owners are opting for short-term fixed-rate rental contracts, which they find more advantageous and flexible. At the same time, some cities, such as Milan, are seeing a decline in short-term rental contracts. Many owners are starting to opt for traditional rental forms again, which has somewhat slowed the growth of rental rates in Milan, where prices have already reached very high levels and are becoming unaffordable for most residents.

For the first time in Milan, rental contracts have begun to be concluded at an agreed rate, thanks to a revision of reference values carried out by the city authorities.

Cities with the Highest Rent Growth

The rise in rental rates is not limited to Milan, but is observed in all major cities in Italy. In particular, cities such as Bari , Bologna and Rome are showing significant price increases, which is due, among other things, to the high demand for short-term rentals.

In Rome, for example, the approaching Jubilee Year and the expected influx of tourists are prompting property owners to forego long-term contract renewals in favour of more profitable short-term solutions.

However, Milan remains the most expensive city to rent: the average rate is €820 for a one-room apartment, €1,140 for a two-room apartment and €1,510 for a three-room apartment. In provincial cities, prices also continue to rise: rent for one-room apartments has increased by 2.7% , two-room apartments by 2.4% and three-room apartments by 2.5% .

Demand remains high, especially for quality housing. The greatest interest is in well-furnished apartments located in areas with developed infrastructure and good natural light. At the same time, the cost of maintaining the house plays a significant role in choosing housing, which is becoming an important factor for tenants.

Why choose rental housing?

In the first half of 2024, 69.3% of renters were looking for a place to live permanently. This figure is down slightly from 70.1% in the same period last year. This category of renters includes those who cannot afford to buy a home and those who consciously choose to rent for greater flexibility or convenience.

At the same time, the share of those who rent housing for work increased: from 24.9% to 26.0% . Demand for rent among students decreased: from 5.0% to 4.6% .

Types of rental agreements in Italy

Analysis of data for the first half of 2024 shows an increase in the number of short-term fixed-rate leases, which increased to 26.2% compared to 25.4% a year earlier. There was also a small increase in leases at an agreed rate, from 30.1% to 30.3% .

These changes indicate that, despite the tension and difficulties in the market, it is gradually adapting to the various demands of tenants.