Prices for luxury homes in Italy: cost city by city.

The luxury market continues to resist macroeconomic turbulence, with the majority of demand focused on purchasing premium real estate. This is reported in the latest report prepared by the Research Department of Gabetti, based on data from Santandrea Luxury Houses & Top Properties, which analyzes key indicators of the premium housing market to study macro trends in major cities (Milan, Rome, Turin, Genoa, Florence, Naples, Bari).

The "elasticity" of the luxury real estate segment

The last few years have been marked by various events, such as the pandemic, the Russian-Ukrainian conflict, inflation, and rising interest rates, which have created a somewhat unstable macroeconomic situation. However, the premium housing market continues to grow, thanks to a high number of wealthy individuals who invest about 15% of their wealth specifically in this category of real estate. Global wealth in 2022 remained above 80 trillion dollars (World Report Series 2023, Capgemini), staying virtually stable, with North America, Europe, and Asia dominating, regions that are driving growth and financial performance on an international level.

One might wonder why the premium real estate market so successfully resists market fluctuations. Leone Rignon, the CEO of Santandrea Luxury Houses & Top Properties, answers this: "When purchasing this type of property, there is no significant financial leverage involved, unlike when buying regular housing. In the luxury market, potential buyers primarily acquire properties out of a desire to enjoy exclusive living and uniqueness in their own right."

Unconditional financial capability and the desire to have an outstanding place to live.

"They are the engines of purchase. 'According to our research at Santandrea,' continues Rignon, 'the demand for premium real estate is primarily focused on buying (70%), while 30% of the demand is related to renting. The goals of purchasing are largely associated with exclusive use as a primary residence or a second home. However, there is also a growing demand for investment with alternative use of the property: exclusive use by the owner during certain periods of the year and renting it out during the remaining periods.'"

Who buys luxury real estate in Italy?

In 2022, according to notary statistics, sales of luxury residential real estate increased by 9% compared to the previous year. This is a market characterized by the desire to own exclusive properties and the need to maximize investment returns. Most transactions involving amounts over one million euros pertain to the purchase of second homes. Analyzing historical data, it is evident that the trend is consistently growing, with primary housing increasing by 92% and secondary housing by 61% over the past five years.

But who is buying luxury real estate in Italy? "The target audience for premium real estate is primarily international, accounting for about 70% of buyers, while 30% are Italians. In 2023, property prices continued to rise, with some cities experiencing price stability, and major cities analyzed in the report showing a fair balance of supply and demand for real estate. Expectations are certainly positive, especially regarding the most famous tourist destinations, where secondary housing is typically purchased. For example, there has been an increase in demand for Santa Margherita Ligure. Additionally, we are noticing a revived interest in major Italian cities, primarilyMilan andRome, as well as in secondary cities like Turin, Naples, and Genoa, which are beginning to regain their appeal after the pandemic," notes Rignon.

Profiles of buyers of premium real estate in Italy

They primarily belong to Generation X (1965-1979) and Younger Boomers (1955-1964). According to a recent study (Generational Trends in Home Buying and Selling Report, NAR 2023), individuals with the highest net worth are concentrated in the age group of 50 to 70, displacing millennials.

Prices for luxury homes in each individual city

Milan

Milan continues to be in the spotlight due to large projects and investment opportunities in real estate. Prices for new buildings and renovation projects are rising slightly, especially in central areas. The average difference between asking and actual prices is about 8.8%, with peaks of 10% in the Quadrilatero and Palestro-Duse districts. The average selling time is 4-6 months, but in some more dynamic cases, it can be reduced to 3-4 months, such as in the historic center, Brera, and Magenta-Pagano-Castello. Among a sample of 828 properties priced over one million euros, the largest share consists of apartments ranging from 146 to 200 square meters, followed by those from 201 to 250 square meters. In terms of pricing, almost all properties in the city ofMilan valued over one million euros fall within the range of 1 to 2.4 million euros, with only one property exceeding 9 million euros in the luxury category. The supply is concentrated in the historic center and is dispersed across semi-central areas.

Rome

Rome remains dynamic due to its strategic location and current and upcoming projects that create conditions for potential real estate investments. Property prices in the city ofRome, both for new builds and for renovation projects, are rising slightly, especially in central areas. The average difference between the asking price and the actual sale price is about 7.4%. The average selling time is 5-9 months, and in the most vibrant areas, sales can take up to 4 months. In a sample of 1,034 properties priced over one million euros, the distribution by area is diverse, with the most common sizes ranging from 251 to 350 square meters, followed by categories from 146 to 200 square meters and from 201 to 250 square meters. In terms of pricing, nearly all properties in the city of Rome valued over one million euros fall within the range of 1 to 2.4 million euros. There are about 5 high-end properties priced over 9 million euros in Rome. The supply is mainly concentrated in central areas, but it is also present in less central locations.

Genoa

Genoa is a city that is constantly evolving, and the real estate market reflects this trend.

Naples

Naples is a city rich in history, culture, and traditions, known for its active construction sector. Prices remain stable compared to last year. The average selling time is 5-9 months, with Vomero being the most dynamic area (3-6 months). In the Chia and Posillipo districts, the time frames extend to 6-10 months. In a sample of 161 properties priced over one million euros, the largest share belongs to apartments ranging from 146 to 200 square meters, followed by those from 201 to 250 square meters. In terms of prices, almost all properties in the city of Naples valued over one million euros fall within the range of 1 to 2.4 million euros, while the rest are classified as high-end. The supply is concentrated in the Chia, Posillipo, Vomero, San Giuseppe, and San Ferdinando areas.

Turin

Turin has significant potential and continues to be attractive and dynamic for real estate investors. Prices remain unchanged, staying stable across all areas of the city. The average difference between the asking price and the actual sale price is about 10%, which is consistent with the past six months. The average selling time is 4-8 months. In a sample of 95 properties priced over one million euros, the distribution is based on larger areas, with the main categories including properties from 251 to 350 square meters, followed by those over 500 square meters. In terms of pricing, almost all properties in the city of Turin valued over one million euros fall within the range of 1 to 2.4 million euros, while the rest are classified as high-end. The supply is concentrated in the Centro/Crocetta and Borgo Po/San Salvario neighborhoods.

Bari

Bari is a city that continues to develop and has a rich and diverse cultural offering. Prices vary and are increasing in the Murat, Madonnella, and Marconi areas, while they are decreasing in the Libertà and Japigia neighborhoods. Real estate prices in Bari are at last year's level, with slight increases in the most sought-after areas such as Murat and Poggiofranco. The average selling time is 6-12 months. In a sample of 11 properties priced over one million euros, the main size categories range from 201 to 250 square meters, from 251 to 350 square meters, and over 500 square meters. In terms of prices, all properties in the city of Bari costing over one million euros are in the range of 1 to 2.4 million euros. The supply is concentrated in the Picone/Poggiofranco and Murat/San Nicola neighborhoods.

Florence

Florence is a city of art and culture that attracts tourists from all over the world, especially from the United States. Property prices in the city of Florence remain at last year's levels, with a slight increase in the higher price categories of new renovations and properties for renovation. The most expensive area is Lungarni, followed by the historic center and Oltrarno. The average selling time is 3-8 months. In a sample of 225 properties priced over one million euros, the distribution by area is diverse, with the most common sizes ranging from 251 to 350 square meters, followed by those from 351 to 500 square meters. In terms of prices, almost all properties in the city of Florence priced over one million euros fall within the range of 1 to 2.4 million euros, while the rest belong to the luxury category. The supply is predominantly concentrated in the historic center.