The Italian Real Estate Market: A Quick and Essential Guide

Dear MLS and CEPI Colleague,

Attached you will find a brief guide on the Italian real estate market. The guide contains a series of sections with the following information:

1. Who is FIAIP (Federazione Italiana Agenti Immobiliari Professionali)
2. Italian Real Estate Market Trends
3. Italian Real Estate Market for Foreign Buyers
4. Property Purchase Process
5. Italy’s Golden Visa Program

For any further information, please do not hesitate to contact me.

Best regards,
Davide Draghetti
Head of European Foreign Institutional Activities – FIAIP
Mobile + 39 349 096 4012
[email protected]

FIAIP (Italian Federation of Professional Real Estate Agents)

Fiaip (Italian Federation of Professional Real Estate Agents) is the key reference for professionals in the real estate sector and Italian families. It is the main trade association in the sector recognized by the European Community, with 10,106 real estate agents, 500 credit consultants, 15,200 real estate agencies, and over 45,000 industry professionals (including real estate agents, tourist agents, credit consultants, real estate promoters, property managers, and administrators).

With a widespread presence across the country, through 20 regional offices and 105 provincial and interprovincial branches, Fiaip offers its members professional information, consultancy, and union protection.

For over 45 years, Fiaip has been one of the largest and most dynamic European trade federations and is also accredited by the European Parliament. In Italy, it serves as the technical advisor to the Parliamentary Observatory of the Real Estate Market (O.P.M.I.), which includes numerous deputies and senators from both the majority and opposition. Thanks to the active political and union efforts of its national leaders, some Fiaip proposals have been transformed into amendments presented and, in many cases, approved by Parliament and the Government, benefiting the entire sector.

Fiaip is a member of Confindustria, Confedilizia, Tecnoborsa, and Confassociazioni, and collaborates with CEPI (European Association of Real Estate Professions) and NAR (National Association of Realtors). The Federation promotes and supports numerous initiatives with related federations, institutions, and consumers. It is involved in working groups across the Italian real estate sector to support professionals and agencies operating in the real estate market.

Fiaip, together with social partners, has negotiated a first-level National Collective Labor Agreement (C.C.N.L.) for real estate agents, which sets work regulations. In some regions, second-level collective agreements have also been established. The contract applies to employees of real estate agents, credit consultants, and those under mandate agreements. Additionally, Fiaip has created the bilateral body Ebnaip (National Bilateral Body for Professional Real Estate Agents) following the signing of the C.C.N.L. with FILCAMS-CGIL, FISASCAT-CISL, and UILTUCS. Ebnaip is responsible for organizing, managing, and promoting the C.C.N.L., supporting professional training activities, and providing healthcare assistance for both employees and employers.

Among its many initiatives, Fiaip also monitors and presents data on the performance of the Italian urban and tourist real estate market, providing both past and future trends in the medium term. Today, Fiaip is the only sector association capable of offering its members a wide range of qualified services, including behavioural and legislative guidance and professional training.

The Federation, which promoted and developed a specific reference practice for professional real estate agents (UNA-Fiaip), in line with European standards (UNI EN 15733) and fully compliant with UNI 11932:2024 and UNI 11558 for real estate appraisers, has become an “Intertek Exam Center” for the certification of real estate agents and appraisers.

Through its High Training Center, Fiaip organizes and promotes certification exams nationwide, ensuring that certified professionals are listed in a public registry on the Accredia portal (the Italian accreditation body) and the European ESCO portal. Certified professionals guarantee the high-level expertise required for the real estate profession, which is vital for institutional stakeholders. Since its founding, Fiaip has ensured transparency in communication and behaviour, both among its members and towards the entire real estate sector. The constant professional development of its members allows them to offer high-quality assistance to their clients and all consumers, fully adhering to the Federation’s Code of Ethics and Conduct, which are integral to its Statute.

Italian Real Estate Market Trends

In 2023, there was an increase in the purchase of second homes, particularly for investment purposes aimed at generating rental income. This occurred alongside a general decline in residential property sales, demonstrating that real estate continues to be the most sought-after and reliable investment option to safeguard citizens’ savings, which have been significantly impacted by inflation.

The data from Fiaip Monitora, which tracks trends in the Italian real estate market and has been conducted for over ten years in collaboration with ENEA (Italian National Agency for New Technologies, Energy and Sustainable Economic Development) and I-Com (Italian Institute for Competitiveness), reveal that, according to a sample of about 600 real estate agents, this is the snapshot of the real estate market in 2023 and the forecasts for 2024.

In 2023, compared to the previous year, the total number of residential transactions decreased, dropping to around 700,000, a 10% decrease compared to 2022. However, this figure remains at levels not seen for over fifteen years, excluding the two post-COVID years. Italian real estate agents reported a 30% decrease in mortgage usage for property purchases, primarily due to the significant rise in mortgage interest rates (with ten rate increases in one year) and a decline in first-home purchases. In contrast, there was a sharp increase in the use of personal savings, which nearly doubled compared to 2022, leading to a 1.5% rise in second-home purchases compared to the previous year.

These data, along with the fivefold increase in studio apartment sales compared to 2022 and the rise in one-bedroom apartment sales (+64%), explain the considerable growth in investment purchases aimed at generating rental income in 2023, up 28% from 2022. In fact, this type of property, especially in large cities, has seen strong demand, particularly for rentals to students, out-of-town workers, and short-term rentals, especially for tourism, which has tripled in Italy over the past six years. Last year, Italians used part of their savings to protect them from the effects of inflation by purchasing second homes, often to rent them out—particularly through short-term rentals—while relying less on credit.

Notably, compared to 2022, there was a decline in sales in suburban and outer suburban areas after two years of post-pandemic trend reversal, while sales in semi-central areas increased (+35%), highlighting the growing need to live near services (a factor that grew by 20% as a key consideration for buyers). This reflects a fast-paced lifestyle but with the convenience of parking and green spaces. Additionally, there was an increase in sales in high-end areas (+30%), confirming the widening gap between “rich and poor,” with a growing strain on the so-called “grey area” of the population, especially due to the significant rise in the cost of living, which has not been matched by necessary wage adjustments.

In terms of market values, there was an average increase of 2%. More specifically, values remained relatively stable in small to medium-sized cities, while average increases of around 5% (in some cases, like Milan, even 6%) were recorded in large urban centres (metropolitan cities, university towns, and cities with strong tourist appeal), where demand far exceeds supply. In fact, over 40% of real estate agents reported a significant decrease in property supply in 2023, compared to steady or even growing demand, especially in major cities.

In 98% of the transactions intermediated, the parties involved are private individuals. For 54% of respondents, the most requested mortgage amount in relation to the price is 85%. Among foreign buyers in Italy, 77% are citizens of European Union countries, while 47% of non-EU citizens require a mortgage to purchase a home.

The most frequently purchased type of property, although down by 10%, remains the three-room apartment (60%), with used properties making up 64% of sales, located in semi-central areas (58%). First-home purchases are declining and increasingly defined as “replacement purchases” (buying a larger home while selling a smaller one or vice versa). According to 52% of real estate agents, price negotiability typically ranges between 5% and 10% of the market asking price.

Both the performance of sales (stores +0.2%, offices -0.2%, warehouses +0.1%) and prices (stores -0.1%, offices -0.2%, warehouses +0.3%) have remained largely in line with the trends of the past two years, 2021 and 2022. This can be explained by a balance between certain commercial, professional, and production activities that have shown and continue to show strong performance (such as pharmaceuticals, technology, and healthcare) and other sectors that have been heavily impacted by rising energy costs, increased mortgage interest rates, and the devastating effects of inflation (such as restaurants, textiles, and small-scale retail businesses).

Rentals

The rental market, compared to 2022, ended on a positive note for residential properties, with an average increase of 7.5% in the number of rental contracts. The most rented property type is the one-bedroom apartment (44%), used (62%), located in semi-central areas (50%). For non-residential uses, the following trends were observed: commercial (stores) +3%, office (directional) +1.2%, and industrial (warehouses) -0.2%, indicating a generally stable situation compared to 2022.

Notably, there was a fivefold increase in studio apartment rentals compared to 2022, especially in large cities where there is significant demand for rentals, particularly from students and out-of-town workers (it is common to rent out individual rooms). This guarantees high returns for investors. Meanwhile, one-bedroom rentals remained stable, while there was a significant decline in three-bedroom rentals due to a lack of supply on the market. Demand for rentals in prestigious and semi-central areas has increased, and there was a 20% rise in the rental of renovated properties.

As for the average rent prices, residential rents increased by 8%, while commercial (stores) rents dropped by 2.5%, office (directional) rents fell by 2.2%, and industrial (warehouses) rents slightly increased by 0.1%. This slight decline in average rents, particularly in non-residential sectors, is primarily due to the economic situation marked by the rising cost of living, creating a generally challenging environment, especially for certain types of businesses.

Major Urban Centers

Regarding the major urban centres, the cities that experienced the least negative impact from the general decline in property sales—and, in fact, saw stability or even an increase in market values and rental demand—are metropolitan areas, university towns, and cities with strong tourist appeal.

For property sales, the changes were as follows:

Milan -8.8%, Bologna -7.2%, Florence -9%, followed by Turin -8.1%, Naples -4.9%, Rome -7.5%, Genoa -6.2%, Venice -8.1%, and Palermo -9.2%. As for average prices: Milan +6.2%, Bologna +4.6%, Florence +3%, followed by Turin +1.8%, Naples +4.4%, Rome +1%, Genoa +3.8%, Venice +2.7%, and Palermo +4%.

For rentals, the increases were:

Milan +9.8%, Bologna +8%, Florence +7.8%, Rome +5.2%, Naples +5%, Venice +4.5%, Turin +3%, Palermo +2.5%, and Genoa +2.3%. Average rental rates also rose, with Milan at +8%, Bologna +7.8%, Florence +7.6%, Rome +5%, Naples +4.8%, Venice +4.2%, Turin +4%, Palermo +3.9%, and Genoa +1%.

In a highly unpredictable context due to recent energy price increases, inflation—hopefully now under control—and rising mortgage interest rates, which we also hope will progressively decrease following the end-of-year halt in ECB rate hikes, along with the socio-economic consequences of military conflicts in Ukraine and the Middle East that are destabilizing international economic balances, the Italian real estate market remains of strategic importance for the economic, social, and employment stability of the country.

2024 Forecast

In 2024, property sales are expected to follow a similar trend to 2023, with a further increase in investment purchases and a general stabilization of property prices, except in large urban centres. In these areas, we anticipate a consolidation or even an increase in demand for rentals, particularly from students, out-of-town workers, and tourists, without a corresponding increase in supply. This will lead to an additional rise in average market values in major cities by around +3%, while in medium to small cities, we expect more stable market values, if not a slight decline, especially for older properties in need of renovation, due to the significant reduction in the Superbonus, which has dropped from 110% to 70% over the past two years.

On the one hand, concerns about the rising cost of living and stricter credit access criteria persist. On the other, the associated risk and low return on financial investments, combined with the large liquidity accumulated by Italian families, continue to encourage real estate investment, particularly in rental properties, especially short-term rentals, to maximize profitability.

The type of property purchased will increasingly be influenced by the demographic trends in our country — a topic often overlooked in current housing policies, which lack strategic vision. Italy has one of the lowest birth rates in the world, resulting in an aging population; already, about 10 million people live alone, 6 million of whom are over 65. This is why studio, one-bedroom, and three-room apartments will become the most sought-after property types.

As a result, a 3% increase in rental contracts is estimated, along with an additional average rise in residential rental rates of around 5%, with potentially higher growth in metropolitan and tourist cities, where high demand guarantees strong returns. For non-residential properties (stores, offices, and warehouses), a slight average increase of 1% is expected in both sales and rentals, along with a concurrent average drop in market values (both prices and rents) of around -2%.

Energy Efficiency

From the analysis of real estate market dynamics concerning energy efficiency conducted by ENEA, I-Com, and FIAIP, it emerged that in 2023, while the latest energy performance classes remain the clear majority across all analysed property types (ranging from 72% of apartments in classes E, F, and G to 63% of terraced houses), there has been a noticeable decrease in the percentage of buildings in class G compared to the previous year. This is particularly evident for two-room apartments (9% in 2023 compared to 27% in 2022) and terraced houses (20% compared to 24% the previous year). Across all property types, there has been a significant increase in buildings in class D.

In extreme peripheral areas, 83% of the properties sold are in the less efficient energy classes (E, F, and G), with the share of more efficient buildings (A and B) barely reaching 5%. In contrast, in prestigious areas, 45% of properties are in the top energy classes (A and B). These figures are like those of 2023, with a slight increase in the disparity.

Similarly, there is a dichotomy in the condition of the properties: while properties requiring renovation are largely energy inefficient (83% in the bottom three energy classes), 70% of new properties fall into the top energy classes (A and B). For properties in need of renovation, there has been a 17-percentage point increase in buildings in class G.

Regarding the temporal trend of transactions in the top energy classes (A and B) based on property condition, new properties show a very high and stable value (70%) compared to the previous year. For renovated properties, there has been a recovery from the decline observed between 2019 and 2020, following a significant increase during the 2017-2019 period, reaching 38% in 2023 (the highest recorded value so far). The increase from 2022 in the number of sales of renovated properties, primarily through the Superbonus, is +45%. Values for other types of properties remain relatively stable.

According to real estate agents, in 2023, the gap between buyers and sellers regarding the importance of energy efficiency in a property has further widened. 62% of buyers (up from 54% in 2022) are aware of the importance of energy efficiency, whereas only 42% of sellers share this awareness. Despite this awareness, energy efficiency remains a largely overlooked factor when purchasing a property, though it has seen significant growth compared to 2022. This suggests that energy quality is increasingly being considered in buyers’ evaluations, likely due to rising energy costs and inflation, which particularly affected the first half of the previous year.

The Energy Performance Certificate (APE) certainly helps guide users’ choices towards properties with better energy quality (62% of respondents) and is a useful tool for assessing the greater comfort of homes in higher energy classes (53%). These percentages remain stable compared to the previous survey.

An area of concern is related to the evaluation of real estate agents regarding the main barriers that clients experience in giving preference to high-energy-performance properties in their purchasing decisions. The primary factor is financial, linked to the budget available for purchasing an energy-efficient home (36%, like 2022). More nuanced are the responses regarding the other two main barriers: the perception that higher purchase costs are not adequately offset by savings, and the reluctance to pay an additional cost (18%, slightly higher than the previous year), versus the preference to address property renovation at a later stage (19%, also increasing from the previous year). In any case, the survey highlights the predominance of economic-financial concerns over all other aspects, which are considered marginal in this context.

It is also noteworthy that the interviewed real estate agents are inclined to include a “green renovation” category in property listings to provide a valuation for properties that have been upgraded from an energy efficiency perspective, a suggestion favoured by 66% of the respondents. This could help overcome the challenge faced by the credit system in offering financing products that support energy-efficient property upgrades. The most cited reason by respondents (42%) is the market’s insufficient ability to reflect the added value associated with energy efficiency.

Regarding the knowledge of the main incentives available for citizens to carry out energy renovations of residential buildings, as perceived by real estate agents, it is observed that tax bonuses and deductions, perhaps due to widespread informational campaigns and greater simplicity of the tool, are particularly well-known to buyers. This contrasts with more sophisticated instruments such as the thermal account and green mortgages, where knowledge levels are very low or nearly non-existent, confirming the trend from recent surveys.

The construction sector — particularly renovation work — has been significantly influenced by tax deductions for green and seismic renovations (especially the Superbonus 110%). A significant portion of respondents (52%) believes that the Superbonus 110% has had a substantially positive impact on the real estate market, facilitating the process of ecological transition in real estate, with a notable increase compared to 2022 in the percentage of those who consider this impact very significant (35% in 2023 compared to 20% in 2022). The percentage of those who consider this impact not significant has decreased substantially (17% this year compared to 26% the previous year).

Specifically, although a large part of the sample did not observe differences in either the demand or supply of properties, whether with high or low energy performance, there is a markedly higher percentage of real estate agents who have noticed an increase in high-performance properties (39% for demand and 44% for supply).

While for less energy-efficient properties, the increase in both demand and supply was also positively lower in 2023 (23% and 25% respectively). This figure has decreased compared to the previous year and contrasts partially with the data on properties sold and those needing renovation in class G. In 2023, these properties represented 64% of the market for this segment, compared to 47% in 2022.

As highlighted last year, the increase in demand and supply of more energy-efficient properties induced by the Superbonus 110% might reflect an indirect impact of this tool, which tends to enhance the quality of real estate demand (leading to an adjustment in demand) concerning the energy performance of residential buildings. Less significant, in the view of real estate agents, is the possibility that the Superbonus 110% has stimulated the demand for poorly efficient properties to be later upgraded with this tool. This second hypothesis seems indeed more complex given the substantial regulatory uncertainty that has characterized the Superbonus 110%.

This confirms how the Superbonus has been a measure that strongly incentivized the gradual, albeit slow, process of green real estate transition by enhancing the quality of real estate demand (resulting in a corresponding adjustment in demand) concerning the energy performance of residential buildings. It is therefore debatable whether the intention to end this strategic measure for the real estate market, even from a “green” perspective, is justified.

Finally, it is interesting to analyse the differences compared to previous years regarding the impact on the real estate market of the obligation, starting from 2021, for newly constructed buildings to meet the nearly zero-energy building (NZEB) standard. After the significant variation recorded between 2021 and 2022, the percentage of those noting a lack of interest from clients in this type of building has stabilized, as has the percentage observing increasing interest from buyers in nearly zero-energy buildings. This demonstrates the importance of increasing public awareness regarding this issue, especially in view of the obligations, although adequately moderated, that will result from the new directive on the energy performance of buildings.

Data Analysis 2023 and Trends for 2024 – prepared by the FIAIP Research Center.

Italian Real Estate Market for Foreign Buyer

Italy continues to be one of the most sought-after real estate destinations for foreign buyers.

Origin of Buyers: The United States in the Lead

The United States maintains a leading position with 30% of requests, marking a 2.8% increase compared to the same period in 2023. This rise highlights the growing interest of Americans in the Italian real estate market. Other countries like Germany (10%), the United Kingdom (9%), Italy (requests from foreigners while staying in the country) 4%, France (4%), and Canada (4%) continue to show strong interest. Australia stands out with an exceptional 22% increase compared to last year, accounting for 2% of total requests.

Areas of Greatest Interest: Between Tradition and New Discoveries

Lake Como, with 4.8% of requests, remains one of the most sought-after destinations, followed by Salento (4.8%) and Lunigiana (3.4%), which saw respective increases of 13% and 1.7%. In fourth place is Valle d’Itria (2.3%), followed by Monferrato (1.7%). Noteworthy is the surprising growth of the Gulf of Tigullio, which, despite being in sixth place, has become a highly coveted area among foreigners, with an 89% increase year-over-year.

Regional Report: Tuscany at the Top

Tuscany remains the most requested region with 17% of preferences, followed by Sicily (10%), which showed a significant 19% increase. Other regions of great interest include Lombardy (8%), Liguria (8%), Puglia (7%), Piedmont (7%), Abruzzo (6%), Calabria (6%), Umbria (5%), Sardinia (5%), Lazio (4%), and Marche (3%). Then come Campania, Veneto, Molise, Emilia-Romagna, Trentino-Alto Adige, Basilicata, Friuli, and Valle d’Aosta. It is particularly interesting to note the increase in demand for Calabria, which saw a 26% rise, and Emilia-Romagna, which grew by 4%.

Notable Towns

Among the most requested Italian towns, Ostuni and Scalea are in first place, followed by Portofino, Fivizzano, Todi (+19%), Lucca, Caltagirone, Carovigno, Noto, and Tropea, which recorded a 4% increase.

Analysis of Provinces: Lucca and Cosenza on the Rise

The provinces of Lucca and Cosenza have shown notable increases in the semi-annual report, with Lucca registering a 5% increase and Cosenza seeing a 50% growth. Lecce also saw a significant increase in requests, up 29%.

Property Types

Foreigners are mainly looking for houses, with 75% of requests. About 53% of buyers prefer properties over 120 square meters. Restored and ready-to-move-in properties attracted 64% of requests in the first months of 2024.

2024 Report: Price Ranges

The demand for properties covers various price ranges, with 42% of requests for properties valued at up to 100,000 euros. This is followed by 24% for properties priced between 100,000 and 500,000 euros. About 16% are looking for homes priced between 250,000 and 500,000 euros, 9% between 500,000 and 1 million euros, and 6% for properties over 1 million euros.

Future Prospects

The Italian real estate market continues to exert a strong appeal to foreign buyers, thanks to its scenic beauty, cultural heritage, and quality of life. The significant increases in demand from various nationalities and in specific areas and towns indicate an expanding and continuously evolving market.

Italy confirms itself as an irresistible destination for international buyers, with an increase in requests that underscores the charm and value of our real estate heritage. Interest from this audience offers increasingly new sales opportunities, but understanding their needs requires real estate agents to have a deep knowledge of the international market.

Source – GateAway.

Property Purchase Process

The list below covers the main steps you will go through when buying a property in Italy:

1. THE FISCAL CODE
The first thing you need to get familiar with is the CODICE FISCALE. If you are thinking to purchase a property in Italy, in fact as well as to open an Italian bank account you will need a CODICE FISCALE. It is an identification code calculated on the basis of your surname, your names, the place of your birth and the date of your birth and which will be used any time you will need to deal with the Authorities: