Real estate market forecast in 2024: prices continue to rise.

Forecasts for the real estate market in 2024: prices will continue to rise, especially for rentals.

In the last quarter of 2023, there was a slowdown in buying and selling transactions, but prices mostly remained stable or increased slightly. As for the next year, a price increase is expected for both buyers and renters.

Forecasts for the real estate market in Italy for 2024 have been conducted by specialists from Immobiliare.it Insights, a proptech company specializing in market analysis and artificial intelligence, analyzing data from the 12 largest Italian cities. The study aimed to predict changes in the price per square meter of housing for sale and rent.

According to Istat data, in the third quarter, the annual growth in housing prices was 1.8%, despite a decline in sales.

Let's take a look at the forecasts for individual cities. InMilan, a steady increase in both rental and sales prices is expected, around 2%. InRome, sales prices are anticipated to rise by 1.1% and rental prices by 2.4%. Catania (+6%) and Verona (+4.1%) stand out with significant increases in sales. As for rentals, Naples and Florence show the most substantial increases of about 17%.

When considering prices for those looking to buy a home, it can be noted that in Catania, the price per square meter will increase by about 80 euros, reaching 1334 euros. Milan will remain the most expensive city in Italy, with the price per square meter approaching 5500 euros, which is 100 euros more than the current values. A significant increase in the budget for finding housing will also be necessary in Verona, where prices will rise from the current 2546 euros per square meter to 2651 euros.

In Naples, Genoa, Bari, Venice, and Turin, a positive change in housing prices per square meter is also expected, although the values will vary significantly. Prices per square meter will range from 3,415 euros in Venice to 1,707 euros in Genoa, with Bari and Turin expected to exceed the 2,000 euro mark for the first time by the end of next year. Housing prices in Rome (1.1%) will remain stable, while Bologna (1.8%) will surpass the capital by more than 250 euros per square meter (3,606 euros compared to 3,351 euros).

When it comes to rent, Milan is not the most expensive city.

Housing prices in Milan will rise across all neighborhoods, but the most significant increases in sale and rental prices will be noticeable in more peripheral areas, which will continue to attract consumers with their relative affordability. In the Ponte Lambro-Santa Giulia area, sale prices are expected to rise by 7.8%, while rental prices will increase by 8.6%. In Biseglie-Baggio-Olmi, rental prices are anticipated to grow by 11.8% and sale prices by 5%.

The situation in Rome will be different. When it comes to sale prices, most neighborhoods are showing moderate growth, but in the rental market, there are areas where a significant increase in costs is expected. These areas include Appio Claudio-Capanelle (+13.7%), Aurelio-Boccea (+15.9%), Baldinia-Medaglie d'Oro (+14.6%), Camilluccia-Cortina d'Ampezzo (+12.8%), Portuense-Villa Bonelli (+16.8%), Testaccio-Trastevere (+14.6%) - mainly central and in-demand neighborhoods.

The Chief Business Officer of Immobiliare.it, Antonio Intini, noted that "in terms of the number of transactions, we know that 2023 and 2024 will be far from the record results of 2022, and the trend will return to a normal pace that would have been maintained without the Covid pandemic. However, price changes are happening slowly, so forecasts do not indicate a decrease in prices in 2024."

He also noted that "the rise in mortgage interest rates and inflation has reduced the purchasing demand and ability of Italians to buy real estate, shifting some of the demand to the rental market, which could lead to price increases in response to the growing interest."

As for rentals, in areas where the market has been most dynamic recently, such as Bologna or Florence, it is not always easy to predict how the real estate market will develop next year, Intini emphasized.

According to him, "rental prices are extremely sensitive to socio-economic changes in our country, and private landlords quickly adjust the prices of their properties to meet new market demands. It is essential to closely monitor the current situation to understand how specific events, regulatory norms, and guidelines will affect housing prices, especially in tourist-oriented areas."