The Italian real estate market: rising prices and stabilizing demand in 2024

The Italian real estate market in 2024 shows steady, albeit uneven, price growth, accompanied by signs of stabilizing demand and construction activity.

Data provided by various sources allows us to get a complete picture of the situation.

According to Idealista, in the third quarter of 2024, the average price per square meter of housing in Italy was € 1,851, showing an annual increase of 2.2% (1.5% adjusted for inflation) and a quarterly increase of 1.6% (1.3% adjusted for inflation). However, this average figure hides significant regional differences.

While Rome has seen prices stagnate at €3,036 per square metre, showing a minimal annual growth of 0.9% (0.2% adjusted for inflation), Milan, Bolzano and Venice have seen significantly higher rates: €4,988, €4,610 and €4,529 respectively. These cities remain prime markets, attracting both local and foreign investors.

The National Institute of Statistics (ISTAT) provides slightly different data. According to them, the house price index increased by 2.94% year-on-year (+2.17% adjusted for inflation) by the end of the second quarter of 2024, showing a quarterly growth of 3.23% (+2.97% in real terms). The difference in data may be due to methodological features of the calculations and the period for which the information was collected.

Differences in price dynamics are also observed between types of housing. According to ISTAT, new buildings showed significantly higher price growth – 8.08% year-on-year (+7.27% adjusted for inflation) and 4.76% quarter-on-quarter (+4.5% adjusted for inflation). Existing housing showed more moderate growth: 1.88% year-on-year (+1.12% in real terms) and 2.94% quarter-on-quarter (+2.69% adjusted for inflation). This is explained by higher demand for new properties with improved characteristics and modern technologies.

Despite the price increase, the market is showing signs of stabilization. In the last quarter of 2023, the number of real estate purchase and sale transactions amounted to 277,415, which is 3.4% more than in the previous quarter and 0.5% more than in the same period of 2022. At the same time, 93.3% of transactions were for residential properties. The data shows that demand remains stable, although more detailed information on the first quarter of 2024 data on the number of approved building permits is not available in the description provided. However, the mention of "signs of stabilization in the construction sector" indicates positive trends in this segment.

The Italian real estate market in 2024 is characterized by moderate price growth, which, however, varies significantly depending on the region and type of housing. There is stable demand, and the construction sector shows signs of stabilization. Despite some differences in the data provided by various sources, the overall picture points to a fairly positive market dynamic, although investors should take into account regional characteristics and differences in prices for new buildings and existing housing. Further monitoring of the market will provide a more complete picture and make more accurate forecasts.