Luxury real estate boom: trends 2024
In Italy, demand for luxury real estate is on the rise in 2022, with a 9% increase compared to the pre-pandemic period. At the same time, the supply of high-end housing is also increasing and now accounts for 2.3% of the entire Italian real estate market. This data comes from the Luxury Residential Market Review in Italy, in collaboration with LuxuryEstate.com, the leading international luxury real estate portal.
But will this increase continue? According to Dimitri Corti, CEO and founder of Lionard Luxury Real Estate, not only will the market continue to grow, but "average home prices will increase significantly".
The luxury market in ItalyIn Italy, there are about 4-5 companies that deal with the luxury market. I say "roughly" because in practice most of them also have medium or low priced housing. The industry has exploded in recent years, creating a new market segment where buyers are looking for homes and products that are unique and different from the ordinary. It happened, as in the luxury car industry, with the emergence of hypercars, unique models other than supercars.
Do you think this boom will continue? Yes, I think it will. Not only that, I think average real estate prices in certain places will rise significantly; and it's easy to see what's going on in foreign countries. Italy in luxury is several years behind in European and global markets, where prices are very high indeed. People here are surprised by house prices inMilan, where sales can reach 15 thousand euros, but in the rest of the world and in European and world capitals, talk of 30 thousand euros a month for a house is an everyday occurrence. Prices will rise even more in the coming years.
The luxury real estate market in ItalyYou said earlier that the Italian market is a few years behind, how does this manifest itself? It concerns both the prices of real estate and the way to sell a house. Before we opened Lionard, I spent a long time acting as a mystery shopper to see how the world of luxury real estate works in Italy and abroad. And they are two completely different worlds: for example, the sale of real estate in New York, London, the Côte d'Azur or Hong Kong is done transparently, with photos and listings, just as it is done with all other houses. And that was 15-20 years ago. In Italy, it all came with a delay, and we at Lionard were the first to do so.
In Italy, there are about 4-5 companies that deal with the luxury market. I say "roughly" because in practice most of them also have medium or low priced housing. The industry has exploded in recent years, creating a new market segment where buyers are looking for homes and products that are unique and different from the ordinary. It happened, as in the luxury car industry, with the emergence of hypercars, unique models other than supercars.
Do you think this boom will continue? Yes, I think it will. Not only that, I think average real estate prices in certain places will rise significantly; and it's easy to see what's going on in foreign countries. Italy in luxury is several years behind in European and global markets, where prices are very high indeed. People here are surprised by house prices inMilan, where sales can reach 15 thousand euros, but in the rest of the world and in European and world capitals, talk of 30 thousand euros a month for a house is an everyday occurrence. Prices will rise even more in the coming years.
The luxury real estate market in ItalyYou said earlier that the Italian market is a few years behind, how does this manifest itself? It concerns both the prices of real estate and the way to sell a house. Before we opened Lionard, I spent a long time acting as a mystery shopper to see how the world of luxury real estate works in Italy and abroad. And they are two completely different worlds: for example, the sale of real estate in New York, London, the Côte d'Azur or Hong Kong is done transparently, with photos and listings, just as it is done with all other houses. And that was 15-20 years ago. In Italy, it all came with a delay, and we at Lionard were the first to do so.
You said earlier that the Italian market is a few years behind, how does this manifest itself? It concerns both the prices of real estate and the way to sell a house. Before we opened Lionard, I spent a long time acting as a mystery shopper to see how the world of luxury real estate works in Italy and abroad. And they are two completely different worlds: for example, the sale of real estate in New York, London, the Côte d'Azur or Hong Kong is done transparently, with photos and listings, just as it is done with all other houses. And that was 15-20 years ago. In Italy, it all came with a delay, and we at Lionard were the first to do so.
Laws and taxesWhat are the laws in Italy regarding the purchase of luxury real estate? Are there laws that help people buy luxury real estate? Italy has many advantages; one of which is a tax break for the super-rich who establish residency in the country and pay a flat tax of €100,000 per year, regardless of their income. In addition, there are property taxes on real estate that are still available to our foreign buyers and therefore incentivize the purchase of real estate. If you compare it to countries like the US or Northern Europe, where the property tax on ordinary real estate is 2% of the property value annually, in Italy it is the opposite. Overall, there is a tax regime that allows you to buy and maintain properties without any exorbitant costs, as well as tax regimes that facilitate protection.
Unique characteristics of luxury homes
What are the unique characteristics that make a home a luxury home? Basically, it is the view and the unique location of the property. That last point is something to think about: we continue to grow in population, and we will have more and more diverse customers in the future. There will always be people getting more and more wealthy among them, but there is only one thing that cannot increase in the future: real estate with unique characteristics. For example, beachfront villas by the sea, penthouses on the Arno, villas in front of the Colosseum or in Spanish Square are all places that will not be able to increase much in the future. Over the years more and more people will be able to afford these homes, but fortunately they can't be built any bigger or the landscape will suffer.
How real estate sales have changed in recent years.
How has real estate sales changed in recent years? The changes are huge. In our case, we have moved from an approach where the buyer prefers to meet at their home or come to us and spend a few days in Italy to see homes in person and consider all the possibilities, to making a video call of 30 minutes or less and choosing a home to buy immediately. In this respect, not much has changed with our current shopping habits; it's similar to when you store online instead of going to a physical store, same in the luxury world. We have noticed in our company that younger buyers, such as those who have 3-4 million euros and may be looking for a second home, prefer to come here in person and spend a week in Italy to see a dozen places, but those with very high income levels of 25-30 million euros are more likely to say "send me offers, tell me the point on the map, I'll remove what I'm not happy with and pick one or two places to see". They make decisions faster. And as we move forward, more and more people will be like that.
What are the laws in Italy regarding the purchase of luxury real estate? Are there laws that help people buy luxury real estate? Italy has many advantages; one of which is a tax break for the super-rich who establish residency in the country and pay a flat tax of €100,000 per year, regardless of their income. In addition, there are property taxes on real estate that are still available to our foreign buyers and therefore incentivize the purchase of real estate. If you compare it to countries like the US or Northern Europe, where the property tax on ordinary real estate is 2% of the property value annually, in Italy it is the opposite. Overall, there is a tax regime that allows you to buy and maintain properties without any exorbitant costs, as well as tax regimes that facilitate protection.
Unique characteristics of luxury homes
What are the unique characteristics that make a home a luxury home? Basically, it is the view and the unique location of the property. That last point is something to think about: we continue to grow in population, and we will have more and more diverse customers in the future. There will always be people getting more and more wealthy among them, but there is only one thing that cannot increase in the future: real estate with unique characteristics. For example, beachfront villas by the sea, penthouses on the Arno, villas in front of the Colosseum or in Spanish Square are all places that will not be able to increase much in the future. Over the years more and more people will be able to afford these homes, but fortunately they can't be built any bigger or the landscape will suffer.
How real estate sales have changed in recent years.
How has real estate sales changed in recent years? The changes are huge. In our case, we have moved from an approach where the buyer prefers to meet at their home or come to us and spend a few days in Italy to see homes in person and consider all the possibilities, to making a video call of 30 minutes or less and choosing a home to buy immediately. In this respect, not much has changed with our current shopping habits; it's similar to when you store online instead of going to a physical store, same in the luxury world. We have noticed in our company that younger buyers, such as those who have 3-4 million euros and may be looking for a second home, prefer to come here in person and spend a week in Italy to see a dozen places, but those with very high income levels of 25-30 million euros are more likely to say "send me offers, tell me the point on the map, I'll remove what I'm not happy with and pick one or two places to see". They make decisions faster. And as we move forward, more and more people will be like that.
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