News / Insights

In 2025, the Italian residential market consolidated its recovery, returning to widespread growth following the slowdown of 2023. Nearly 767,000 homes were sold, about 46,000 more than in 2024, with increases across all regions of the country: +8% in the Northwest, about +7% in the Northeast, Central Italy, and the Islands, and +2.5% in the South. The trend was particularly strong in non-capital municipalities and smaller markets, with “small” municipalities growing by 9%.

The homes sold covered over 82 million square meters, up 7.4%, with an average size remaining stable at 107 square meters. Total sales revenue reached approximately 124 billion euros, up 8.8%, with 58% concentrated in Northern Italy. Prices also continued to rise: +4% in 2025, following +3.2% in 2024, bringing the cumulative growth in property values in line with that of household disposable income since 2004. In major cities, the market grew by 5.4%; Rome alone accounted for 33% of sales in major cities and recorded a +6.2% increase, while Palermo (+9.4%) and Turin (+6.8%) showed the best performance.

A significant signal also comes from mortgage-financed demand. In 2025, approximately 334,000 purchases were financed by mortgages, accounting for 45.9% of sales by individuals, an increase of 18.3%. The capital disbursed exceeded €47 billion (+25%), with an average loan amount of just over €141,000. The average initial mortgage rate fell to 3.35%, down from 3.60% in 2024, and the average monthly payment decreased by 3.3%, settling at around €650 per month. However, the affordability index showed a slight deterioration: in 2025, it took 3 years and 60 days of household income to purchase an average home, 22 days more than in 2024.

The rental market maintained a positive trend, with over 1 million homes rented in 2025, accounting for approximately 7% of the potentially available housing stock, and a 1.5% increase compared to the previous year. The total number of new housing leases reached nearly 1.3 million units (+1.2%), while total annual rent increased by 5%. The market was driven primarily by subsidized leases, both long-term and transitional, which grew by approximately 6% in volume and 11% in total rent. Together, they now account for over 31% of the market.

The average size of rented homes stood at around 84 square meters, with an average rent of €79 per square meter per year. In municipalities with high housing demand—where over half of Italy’s population is concentrated—subsidized leases account for about 42% of rentals, and the market intensity index reaches 9%. In standard long-term leases, Milan remains the most dynamic and expensive market, with over 29,000 rented homes and average rents of €206 per square meter per year; Florence, Rome, and Bologna follow, with rents ranging from €156 to €167 per square meter. Milan also leads in short-term leases, with approximately 23,000 new contracts and average rents of €167 per square meter, ahead of Rome (€132 per square meter) and Florence (€120 per square meter). For long-term subsidized leases, it remains the most expensive city, with rents close to €183/sqm, while Palermo continues to offer the most affordable rates, often below €60/sqm per year.

Looking at residential real estate developments, the report highlights the growing importance of leverage and administrative timelines. Over 50% of transactions are financed through debt, with peaks nearing 90% in the case of Rome. Average debt levels generally range between 50% and 60%, while the cost of the land accounts for between 15% and 25% of the total transaction value, with higher levels in Tuscany and in the central areas of major cities.

Timelines remain highly variable: the period between land acquisition and the start of construction ranges from about one year in Campania to three years in Rome, while the average construction duration varies from 23 months in Lazio to over four years in Molise. Sales dynamics, on the other hand, are solid and fairly consistent: approximately 75% of units are sold within the first year, 85% within the second, and 90% within the third, with Piedmont and Lombardy characterized by the fastest absorption times.

The focus on Rome clearly highlights the relationship between demand, financing, and regulatory complexity. Projects are concentrated primarily in urban expansion areas outside the GRA and along the Aurelia, Salaria, and Colombo-Ostiense corridors. The capital has a rate of financed developments of 89.9%, an average leverage of 51.4%, and long lead times both for the issuance of permits—32.7 months—and for the start of construction—37.7 months. Central areas combine higher property values, greater reliance on debt, and longer development timelines, while the suburbs show a greater number of projects, but with lower financial intensity and more gradual commercial absorption.