Current Luxury Estate Market in Italy: A Comprehensive Analysis

florence hills luxury house
luxury countryside villa italy

A recent analysis provided by Immobiliare.it Insights, unveiled in June 2024, examines the present circumstances of the premium real estate sector in Italy, encompassing villas, farmhouses, and luxury apartments.

The report emphasizes that, since five years ago, the request for upscale properties in Italy’s most sought-after destinations has risen. This has led to an increase in the available square meters of luxury homes and a reduction of more than 30% in the time required to finalize a sale.

Overview of the Italian Luxury Real Estate Market

The study highlits the luxury real estate market in Italy has shown remarkable resilience and growth over recent years. In 2023, prestigious properties made up 2.7% of the entire residential property supply, marking a 0.5% increase from 2022. Demand for these properties has also seen an upward trend, growing by 2% compared to 2019. This data, sourced from the Observatory of the Luxury Residential Market in Italy by Immobiliare.it Insights, in collaboration with LuxuryEstate.com and Coldwell Banker Italy, paints a picture of a robust and expanding market.

Methodology

The full study can be downloaded here in Italian. It utilizes a unique approach combining statistics, econometrics, urban-geographic analysis, machine learning, and artificial intelligence. This methodology allows for a precise segmentation of the luxury market based on price per square meter and total cost, identifying three distinct luxury levels:

  1. Luxury Extra: High-end properties with a high price per square meter and significant size.
  2. Luxury Small: Properties with a high price per square meter but smaller surface areas, making them more “accessible” in terms of total price.
  3. Luxury Large: Large properties with a very high total price but a price per square meter within the range of the standard market.

Key Trends

  • Market Growth: The luxury real estate market in Italy is experiencing a period of growth. The market share of luxury properties has increased from 2% in 2019 to 2.7% in 2023.
  • Shifting Preferences: There is a growing preference for apartments over villas, particularly in urban areas like Milan and Florence. This trend is reflected in the increased share of apartments in the luxury market.
  • Time to Sell and Time on Market: Despite the economic slowdown, luxury properties continue to sell relatively quickly, with Time to Sell and Time on Market indicators showing a general downward trend.
  • International Buyers: Foreigners are playing an increasingly important role in the Italian luxury market, particularly in areas like Versilia, the Ligurian Riviera, and Puglia.
italian riviera liguria versilia sea house
Foto di Frames For Your Heart su Unsplash

Regional Highlights

The report provides detailed insights into 14 key locations for luxury real estate in Italy, highlighting specific trends and dynamics in each area. Here are some key takeaways:

  • Milan: The city leads the market in terms of total value, with a strong demand for luxury apartments, particularly smaller units in central locations.
  • Rome: The Eternal City boasts a robust luxury market, with a growing interest in both historic properties and new developments offering modern amenities and panoramic views.
  • Versilia: This coastal area in North Tuscany remains a popular destination for luxury villas, attracting both Italian and international buyers.
  • Ligurian Riviera: Known for its picturesque coastline and charming towns, the Ligurian Riviera sees strong demand for luxury properties from both domestic and international buyers, particularly from Northern Europe.
  • Lake Como and Lake Garda: These scenic lake regions are experiencing a surge in demand for luxury properties, driven by their natural beauty and high quality of life.
  • Florence: The city of Florence continues to attract buyers seeking luxury apartments and villas, with strong interest from American buyers in particular.
  • Dolomites: This mountain region has seen a significant increase in demand for luxury properties, fueled by its stunning scenery and growing popularity as a year-round destination.
  • Costa Smeralda: This exclusive coastal area in Sardinia remains a magnet for luxury villas, attracting high-net-worth individuals seeking privacy and exclusivity.
  • Sicilian East Coast: This region offers a mix of historic properties and modern villas, with growing interest from international buyers seeking a unique Mediterranean lifestyle.
  • Terra di Bari: This area in Puglia is experiencing a boom in the luxury market, with strong demand for historic palazzos, renovated farmhouses, and properties with sea views.

Decrease in Time to Sell and Time on Market

One of the significant trends in the luxury real estate market shown by Immobiliare Insights is the decrease in the time it takes to sell properties. The Time to Sell (the period a listing remains on the market before being sold) has reduced significantly, from 8.7 months in 2019 to 5.7 months in 2023. This is slightly longer than the 5.3 months observed in the traditional real estate market.

Similarly, the Time on Market (the average age of listings at a given time) has also decreased. In 2023, the Time on Market for luxury properties was 9.6 months, down from 12.4 months in 2019. This figure is only 2.3 months longer than that for traditional residential properties, which saw a reduction from 8 to 7.3 months over the same period.

Comparative Table: Time to Sell and Time on Market

YearTime to Sell (Luxury)Time to Sell (Traditional)Time on Market (Luxury)Time on Market (Traditional)
20198.7 months5.3 months12.4 months8 months
20235.7 months5.3 months9.6 months7.3 months

The Geography of Luxury Homes in Italy

The distribution of luxury homes in Italy is heavily skewed towards the northern and central regions, with almost 90% of prestigious properties located in these areas. Specifically, the Northwest holds the largest share with 36%, followed by the Center at 32.5%, the Northeast at 20%, the South at 7%, and the Islands at 5%.

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Comparative Table: Distribution of Luxury Homes by Region

RegionPercentage of Luxury Homes
Northwest36%
Center32.5%
Northeast20%
South7%
Islands5%

Value of Luxury Stock by City and Macro Area

In terms of value, Milan leads the pack with a luxury stock valued at 7.35 billion euros, primarily composed of apartments. Rome follows with a luxury stock of 4.50 billion euros, though this represents a 29% decrease from 2019. Versilia, known for its villas, holds 4 billion euros in luxury stock, while the Ligurian Riviera has a stock value of 3 billion euros. Other notable regions include the Lakes (2.7 billion euros), Florence and surroundings (2 billion), Naples (0.8 billion), and the Dolomites (0.7 billion).

Comparative Table: Value of Luxury Stock by City/Area

City/AreaValue of Luxury Stock (Billion Euros)Notable Property Type
Milan7.35Apartments
Rome4.50Apartments
Versilia4.00Villas
Ligurian Riviera3.00Mixed
Lakes2.70Mixed
Florence2.00Mixed
Naples0.80Mixed
Dolomites0.70Mixed
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Market Insights 

Increasing Demand and Buyer Trends

In the first four months of 2024, real estate sales saw a significant increase of 5.6% compared to the same period in 2023, as reported in another important study from Gruppo Toscano. This surge highlights a dynamic market with strong demand for homes that cater to new family and personal needs.

Buyer Profile and Property Preferences

According to the Gruppo Toscano’s analysis, 75% of buyers purchased a home for a change of residence, while 25% bought their first home or as an investment. Three-room apartments are the most sought-after property type, particularly in cities like Como (39%), Turin (35%), Brescia (41%), Milan (36%), Bologna (38%), and Rome (36%). Larger apartments with five or more rooms and four-room apartments also remain popular.

Comparative Table: Buyer Preferences and Property Conditions

CityThree-Room Apartments DemandVacant Properties (%)Properties Needing Renovation (%)
Como39%69%Not specified
Turin35%76%Not specified
Brescia41%48%44%
Milan36%33%Not specified
Bologna38%75%Not specified
Rome36%46%47%
PalermoNot specified75%65%

The Differentiation of Villas and Apartments

The total stock value of all luxury properties in Italy surpassed 53 billion euros by the end of 2023, up from about 48 billion euros in 2022. Luxury villas, in particular, saw significant growth, with their value reaching 30.6 billion euros, a 10% increase from 2022 and an 18% increase from the second half of 2019.

Comparative Table: Value of Luxury Villas and Apartments

YearTotal Stock Value (Billion Euros)Value of Luxury Villas (Billion Euros)Growth in Villas Value (%)
2019Not specifiedNot specifiedNot specified
20224827.82Not specified
20235330.610% (from 2022)

To delve deeper into the intricacies of the luxury real estate market in Italy, visit Italylawfirms comprehensive guides and insightful articles.

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