Are house prices in Italy rising more or less than inflation?

House prices and inflation are a hot topic in Italy in 2023. Despite a slight slowdown, the inflation rate in Italy is still high according to the latest ISTAT survey for February 2023. The consumer price index actually shows an annual increase of 9.1 percent.

In some Italian cities, however, this figure is exceeded by rent increases. Let's find out in which Italian cities real estate prices have risen by more than 9.1 percent compared to 12 months ago, in other words, where in Italy house prices are rising faster than inflation. Milan and Rome, two of the country's major markets, remain outside the list of cities where prices are rising faster than inflation, and are not even in the top 10 cities with the highest increases over the past 12 months. A fact that could be an indication that prices have already reached the limit of solvency for many citizens living there. Let's take a closer look at the situation.

According to the real estate price index from idealista.

the average price of housing for sale in Italy rose slightly on a quarterly basis by 1.8 percent compared to 12 months ago, stabilizing at 1,847 euro/m2.

In particular, as far as regional capitals are concerned, the largest price increases are observed in Monza (15.5 percent), Treviso (11.8 percent) and Bolzano (11.8 percent). In fourth place is Ferrara, where average rental demand has increased by 9.1 percent in the last year. It is followed by Cesena with a jump of 8.8 percent.

Top 10 Italian cities

where average prices rose most strongly on a year-on-year basis in February 2023, complemented by Imperia (+8.4 percent), Gorizia (+8.1 percent), Reggio Emilia (+7.6 percent), Naples (+7.6 percent) and Lecco (+7.6 percent). Milan (7 percent) and Rome (just 0.5 percent) are also growing significantly, but still remain below the inflation index. There are a few cities with negative dynamics. The most negative indicators are recorded in Pavia, Foggia (both -4 percent), Isernia (-4.9 percent), Enna (-5.9 percent), Andria and Asti (both -6.3 percent).

In terms of absolute values, however, the cities with the highest average selling prices are: Milan (4989.21 euro/m2), Bolzano (4517.99 euro/m2), Venice (4437.52 euro/m2), Florence (3922.84 euro/m2), Bologna (3398.03 euro/m2) and Rome (3008.84 euro/m2).