Studio properties: trends and contrasts in the Italian real estate market

In the real estate sector in Italy, there is a significant discrepancy between supply and demand, as confirmed by the results of the first study conducted by CENTURY 21 Italia, a subsidiary of the American real estate giant, in collaboration with the platform Wikicasa. This study covers the entire country and includes an in-depth analysis of the eight largest Italian cities: Milan, Rome, Turin, Bologna, Florence, Naples, Catania, and Palermo.

As a result of the research, it is evident that increased interest rates and changing perceptions of housing are influencing buyer preferences, leading them to seek smaller apartments. Statistics show that the average buyer at the beginning of 2024 is looking for an apartment with an area of about118 square meters, with three rooms, while the sellers are offering apartments with an area of127 square metersand with more than four rooms. In the first months of 2024, many sellers primarily listed three-room apartments for sale or even options with five or more rooms. According to data collected at the beginning of 2023, buyers were looking for apartments with an area of130 square meters...and by the end of the year, this figure had already decreased to...125 square meterswhich highlights the trend towards a decrease in the requested area.

According to Marco Tilezi, the CEO of CENTURY 21 Italia, the reason for these changes lies in significant shifts in housing financing conditions in recent months. He notes that after the pandemic, ideal conditions were created for purchasing larger apartments, but today there is a reverse trend, especially in major cities.

“The rise in interest rates is the main reason for the changes happening, but it’s not the only one,” adds Mattia Colantuoni, co-founder of Wikicasa.

These differences in supply and demand are clearly reflected in prices. According to a study by CENTURY 21 Italia and Wikicasa, today the average price that buyers are willing to pay in Italy is just under160 thousand euros...while the average price at which apartments are sold is around...230 thousand eurosThis clear difference in prices, along with the varying preferences of buyers and sellers regarding square footage and the number of rooms, is not surprising.

Against the backdrop of such data, it can be noted that the rental market appears to be more stable. At the beginning of 2024, approximately22 thousand requestsfor rent, which is almost equivalent23 thousand sentences“This is a visible equilibrium,” says a Wikicasa analyst, “however, economic realities and the new concept of housing, alongside the growing interest in short-term rentals, have led to the rental market quickly becoming saturated, turning into a real ‘shortage’ in the market.”

Rental expenses also have their peculiarities: the apartments offered are generally larger in size than those that tenants are looking for — the average size of the offerings is81 square metersand rental requests — about69 square metersThe research shows that the largest segment of rentals consists of apartments with two bedrooms.7000 sentences) and three rooms (5000 sentencesOn average, tenants are willing to spend700 euroswhile landlords are asking for rent that is on average slightly higherthousands of euros.

DespiteMilan still being a popular city, the analysis also shows a sharp decline in interest in purchasing real estate: at the beginning of 2023, there was a recorded1400 requests...and at the beginning of 2024, this figure dropped to...1000which amounted to a decrease of almost30%At the same time, the number of proposals has increased from4751to more6000As a result, property prices inMilan create the largest discrepancy: sellers list apartments at an average price470 thousand euroswhile buyers are looking for options priced around268 thousand euros.

An equally interesting situation can be observed inRome, where the requested apartment sizes significantly exceed those inMilan—on average.89 square meters...and requests for purchasing housing have increased by more than...1300to1800The average demand price is260 thousand euroswhile the offer starts from340 thousand eurosHowever, the biggest problem remains in the rental sector, where the clear dominance of cheap apartments creates a challenging situation, especially considering the expected increase in demand ahead of the upcoming anniversary.

Market analysis of rental properties in cities like Florence shows significant changes: over the year, the number of rental listings has halved, from1200to600...which indicates high competition in the market. There are also some of the highest prices observed here — the average rent exceeds...2300 eurosfor an apartment with an area82 square meters...which is higher than inMilan, where the average rent is around...2000 eurosUnlike other cities, Naples shows the most stable housing prices with slight fluctuations, where the average price is260 thousand eurosfor apartments with an area of almost100 square meters.

Bologna also showed amazing results: since the end of 2023, the number of rental requests has tripled, increasing to nearly900 requestsAt the beginning of 2024, average rental prices have been steadily rising since 2022 to a level1400 euros.