News / Insights

According to the latest survey on the Italian housing market published by the Bank of Italy—which surveyed a sample of 1,486 real estate agents—the residential real estate market showed signs of further strengthening in the first quarter of 2025, with a marked increase in prices driven by continued strong demand and a shrinking supply.

Sale times and discounts relative to initial asking prices have fallen to historic lows, reflecting increased pressure on prices. The positive balance between assessments of price increases and decreases has reached record levels, particularly in urban areas of the Northeast and Central regions. Despite a decline in new sales listings, transactions remained at high levels, and demand showed a marked improvement compared to the first quarters of previous years. The gap between asking and offered prices continues to be the main obstacle to closing deals. At the same time, the short-term rental market is perceived as a factor that reduces supply in the sales market, driving up both purchase and rental prices.

On the rental front, rents continue to rise at a steady pace, particularly in urban areas of Central and Southern Italy, where reduced supply—often linked to the growing preference for short-term rentals—has further driven up prices. The average discount margin on asking rents remained at historic lows, below 2.5%, and more than half of agents reported increases compared to the previous quarter. New rental listings are down for a significant share of operators, while only a minority report an increase. Short-term expectations remain positive for rents and prices, but two-year expectations have worsened, with a more pronounced negative balance compared to the first quarter of 2024.

Overall, the picture is one of a residential market caught between sustained demand, insufficient supply, and price dynamics driven by both structural and contingent factors, such as the growing weight of short-term rentals.

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