Italy’s real estate market is undergoing a significant transformation, with investors increasingly shifting focus from Milan to Rome. Pricing disparities, market conditions, and upcoming events are positioning Rome as a rising investment hub.
Milan: A Saturated Market Facing Challenges
For years, Milan has been Italy’s financial and real estate hotspot, attracting both domestic and international investors. However, recent trends indicate a slowdown:
Key Challenges in Milan
- High Property Prices: Milan remains Italy’s most expensive city for real estate, with prime residential prices averaging €4,988 per square meter.
- Declining Sales Volumes: Property transactions dropped 7.3% in 2024 compared to the previous year.
- Regulatory Issues: Investigations into construction permits have stalled multiple projects, adding uncertainty for investors.
- Tax Changes: Italy doubled the flat tax on foreign income from €100,000 to €200,000, reducing its appeal for expatriates and foreign investors.
Rome: An Emerging Investment Destination
Rome is experiencing a real estate resurgence, driven by several key factors:
Why Rome is Attracting Investors
- Increasing Investments: In 2024, Rome accounted for 17% of all professional real estate investments in Italy, up from 11% in previous years.
- Holy Year 2025 Impact: An expected 10 million additional tourists and €8 billion in public investments are revitalizing the city’s infrastructure and property market.
- More Affordable Pricing: Average home prices in Rome stand at €3,036 per square meter, with lower-cost areas like Rome East-Autostrade at €1,959 per square meter.
- Major Investors Moving In: Global real estate firms like Hines and CPI Property Group have significantly increased their investments in Rome, recognizing its growth potential.
Milan vs. Rome: A Comparative Analysis
| Factor | Milan (€ per sqm) | Rome (€ per sqm) |
|---|---|---|
| Prime Residential Prices | €12,000 – €14,000 | €8,000 – €9,000 |
| Average Home Prices | €4,988 | €3,036 |
| Sales Growth (2024) | -7.3% | +5.6% |
| Investment Share (2024) | Declining | Increasing |
Why Rome Is the Better Investment Choice in 2025
- More Competitive Prices: Rome offers better value for money, with properties 30-40% cheaper than in Milan.
- Growing Demand: Urban renewal projects and upcoming international events are increasing real estate demand.
- Infrastructure Development: New planning rules introduced in December 2024 make the city more investor-friendly.
- Tourism Boom: The Holy Year 2025 will drive demand for short-term rentals and commercial real estate.
Conclusion
The shift from Milan to Rome is a strategic move for investors seeking growth, affordability, and long-term returns. While Milan remains a strong market, its high prices and regulatory hurdles make Rome an increasingly attractive alternative for real estate investments.
