Research article

Three key cities

We take a look at three cities playing a lead role in Italy’s residential real estate. Transactions are up and new incentives for HNWIs could stimulate the prime market


The capital of the Lombardy region, Milan is also a global capital of design and fashion. Luxury towers have entered the mix of high-end real estate options

Milan is Italy’s second largest city and the country’s premier financial and retail centre. Its diversified economy has outperformed many other Italian cities. Residential transactions were up 22% in 2016 (but remain 13% below peak) and, according to Idealista, prices increased by 1.4% in the second quarter of 2017.

The historic centre is the city’s most prestigious area, notably the Scala and Quadrilatero della Moda quarters. Prices across Milan average €3,400psm, while prime prices can reach €13,000psm.

A number of luxury towers have emerged around the Porta Nuova business district. They include Solaria, Italy’s tallest residential building, and the ‘vertical forest’ terrace planting of Bosco Verticale.

Bosco Verticale

▲ Bosco Verticale

Milan is top for commercial real estate

In 2016, €8.6bn was invested in Italy’s commercial real estate, the highest volume since 2007. A further €3.7bn was invested in the first half of 2017. Institutional investors are taking advantage of Italy’s early position in the market cycle, with an eye to capital growth and better returns. Milan has been the major recipient.

International investors accounted for 72% of invested volumes in the first half of 2017, attracted by a relatively weak euro, better returns compared with other EU countries, and low interest rates. The majority of these deals focused on prime retail and offices, representing 50% and 30% of the total invested volumes respectively.

Galleria Vittorio Emanuele II

▲ Galleria Vittorio Emanuele II


The iconic city that rises from the Venetian lagoon continues to enchant visitors, and the best properties are now increasing in value

There’s a strong, year-round rental market in Venice, supported by the fact that the city’s resident population is outnumbered by the number of visitors it receives daily.

Prime prices in Venice fell by 20-25% from their 2008 high. After a small rebound to 2012 levels, they fell again, but have now bottomed out. The best properties rose by 4-5% last year.

Such is its enduring appeal, Venice is seen as a safe, long-term bet. Gross tourist rental yields exceed 5%, compared with 3% in the open residential market.

Dorsoduro is Venice’s most expensive district, with Grand Canal properties the most in demand. Prime prices average €9,000psm, but values vary significantly on a property basis. Exceptional properties renovated to a high standard in top locations can reach €25,000psm. Apartments on the piano nobile (principal floor) are the most sought after, providing high ceilings and large windows.

Neighbourhood to watch

Beyond the core prime districts of Venice, central parts of Cannaregio are on the rise. Prices here are lower (from €6,000psm to €7,000psm), yet the district is well located and offers good rental potential.

Locals favour the areas of Santa Croce and San Polo, which are central, bound by the Grand Canal and provide easy access to the train station.

Gondolier in Venice

▲ Gondolier in Venice


Quality properties are in high demand in the capital

Activity in Italy’s capital city is rising. The number of transactions in Rome increased by 11% in 2016, but remain 29% below their levels of 10 years ago. Prices are close to stabilising, although no increases have been recorded yet.

Prices across Rome average €3,200psm. Prime properties in the historic heart of the city range from €8,000 to €10,000psm, but those that are well renovated and in the best locations, particularly those with a terrace or view, can reach €15,000psm. Just outside the centre is the prime residential area of Parioli, where prices range from €6,000 to €7,500psm.

New development (including renovation) in central Rome is tightly regulated – obtaining permits for it is difficult. As a consequence, many buildings lie empty, in spite of the high demand for finished properties. New and renovated homes carry a significant premium as a result.

Area on the rise

Quartiere Trieste is home to a mix of students and young professionals, and currently ranges from €4,500 to €6,500psm. It offers value compared with the neighbouring district of Parioli, but is just as accessible to the historic centre.

Quartiere Trieste

▲ Quartiere Trieste

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