Is luxury real estate in Italy picking up again?

In the Italian real estate landscape, the luxury housing sector is restarting. This is revealed by a recent analysis from the Observatory of the Luxury Residential Market in Italy carried out by Immobiliare.it Insights and conducted in 2024 across 14 strategic areas in terms of market value and composition. Specifically, the North-West stands out as the main macro-area for high-end property offerings, representing 36.2% of the national total. This share remains stable compared to 2023, followed by Central Italy with 31% and the North-East with 20.6%. The South and the Islands, while having a smaller presence, maintain a degree of stability, accounting for 7.2% and 5.1% respectively. Analyzing the market in terms of total value, in 2024 the North-West surpassed Central Italy for the first time, although both still hold similar shares: each area reaches a value of €22.4 billion, together representing over 72% of the Italian market. The North-East follows with €10 billion, or 16% of the total value, while the South and the Islands amount to €3.9 and €3.2 billion, accounting for 6.2% and 5.2% respectively. At the city level, Milan confirms its leadership with a luxury offering valued at €7.7 billion, equal to 12.5% of the national total. Rome, in second place, reaches €5.2 billion, with a 16% year-over-year growth. Among tourist destinations, Versilia maintains its lead in aggregate value, but the most significant growth is seen in the Dolomites, which increased by 29% compared to 2023, reaching €1.1 billion.

In terms of listing dynamics, 2024 shows a 17% increase in the number of luxury properties for sale, although their share of the overall residential market remains stable at 2.6%. After the pandemic-related downturn, the sector’s growth trend resumed in the second half of 2021, peaking in 2023 at 2.7%. The demand slowdown observed last year influenced the increase in supply, but in 2024 both sectors show signs of recovery. The traditional residential segment shows a 29% increase in demand compared to 2019 (+20% over 2023), while the luxury segment grows more moderately, with +4% year-over-year and +6% over 2019. Sales times for prestigious properties remain competitive: by the end of 2024, the average time to complete a transaction is 6.1 months, slightly up from 5.7 in 2023. This figure is still 2.8 months shorter than in 2019, indicating a more responsive market. In comparison, the traditional residential sector records an average time of 5.3 months. Considering the full market cycle, the time on market for luxury homes is 9.6 months, compared to 7.5 months for traditional housing. The luxury apartment offering in 2024 reaches a value of €26 billion, up 14% from 2023, with a total area of 3.7 million square meters. In terms of volume, listings increased by 17.8%, mainly driven by the Luxury Small and Luxury Extra segments. The Luxury Large segment, on the other hand, shows substantial stability over the past five years.

Territorially, the areas with the sharpest growth in supply compared to 2019 are the North-East (+129%) and the Islands (+125%). The North-West also recorded strong growth, with +63% since the first half of 2019 and +18% compared to 2023. In the South and Central Italy, supply is above pre-pandemic levels by 16% and 10%, respectively. At the same time, demand pressure increased by 6% since 2019, with better performance from the Luxury Small and Luxury Extra segments (+5% each), while the Luxury Large shows a 10% decline. The areas with the largest increase in demand are the Center (+28%) and the North-East (+22%). The South, in particular, recorded the highest increase compared to 2023, with +15%. In the second half of 2024, the average time to sell luxury apartments rose to 5.5 months, a 13% increase from the end of 2023, while the time on market remains largely stable. Price per square meter for luxury apartments remains generally stable, contrary to the traditional residential segment, where significant increases have been observed. However, differences are noted across areas: the North-West and the Islands show increases of 3.8% and 2.8%, while the South sees a decline of 4%.

Demand for villas is also on the rise, with a 13% increase from 2019 and 5% year-over-year. The Luxury Large segment saw the highest growth in interest (+19%), while the Luxury Small segment stopped at +9%. The North-East leads demand growth with +17% over 2019, while the Center and North-West stand at +8%. The total stock available has been valued at €35.7 billion, up 40% from 2019, with a total surface area reaching 7.2 million square meters. Here too, the Luxury Small segment grew by +66% since 2019. While Luxury Large shows more moderate increases, the expansion has been more significant than in apartments. Among macro-areas, the North-East, South, and Islands stand out for above-average national growth: +87%, +115%, and +121% respectively since 2019. Despite these spikes, the North-West and the Center continue to hold 65% of the national luxury villa offering. Villas take an average of six and a half months to sell, about a month longer than apartments, while the time on market remains stable at 11 months. Price per square meter remains generally stable, with slight declines in some segments: Luxury Large saw a 4% drop over the last year and 7.5% since 2019, while Luxury Extra has remained almost unchanged since 2019 (-0.2%) and saw a slight increase (+1%) over 2023. Geographically, the South recorded the most marked price drop for villas in the last year (-2.8%), while the North-West posted the most recent increase. Over the past five years, the Center recorded the best price growth (+1.6%), although still below the general average of the real estate market.