Italy’s housing market experienced a modest overall increase of 0.4% in the fourth quarter of 2025, with significant regional disparities, according to data released today by the Agenzia delle Entrate. The period saw over 218,000 transactions nationwide.
The divergence between urban centers and surrounding provinces was pronounced. Whereas sales in provincial capitals decreased by 1.7%, transactions in other provincial municipalities rose by 1.3%, indicating a shift in demand towards less central areas. This trend suggests a growing preference for properties outside major cities.
Regional performance varied considerably. The Northwest led with a robust 3.2% increase, followed by the Central region with 1.6% growth. Conversely, the Northeast experienced a 2% decline, and the South saw a more substantial drop of 5.5%. The Islands region bucked the trend, recording the highest growth at 4.3%. The total area of properties exchanged nationally increased by 1.4%, suggesting a demand for larger homes.
Within Italy’s eight largest cities, market conditions differed. Rome saw an increase in sales, while Milan experienced a 2.3% decrease. Turin also registered a decline, albeit a smaller one at 0.5%. Florence’s real estate market contracted by 7.6%. Other cities reported positive, though varying, rates of change.
Rome demonstrated the highest proportion of first-time homebuyer purchases, exceeding 84%, while Milan led in new construction purchases, accounting for 18.1% of total sales. Nationally, the majority of purchases involved existing properties, with new constructions representing only 8% of the total.
Nearly 45% of home purchases were financed by mortgages. The average interest rate on initial mortgage installments continued its upward trajectory, reaching 3.5% in the fourth quarter – a 16 basis point increase from the previous quarter. Mortgage-financed purchases exceeded 50% in Rome, Bologna, Milan, and Florence.
The rental market remained stable, with a slight increase of 0.6% year-on-year, totaling 278,000 properties leased. Market dynamics varied by region and contract type. Areas designated as “high-tension housing areas” (ATA) experienced growth of 1.2%, while non-ATA municipalities saw a slight decrease of 0.5% in rentals.
Nationally, long-term standard rental contracts decreased by 3%, with a more significant decline of nearly 4% in ATA municipalities. Short-term standard rental contracts also decreased in both ATA and non-ATA areas. However, rentals under subsidized agreements increased by 8.4%. Student housing, a subset of subsidized rentals, saw moderate growth of 1%, with properties rented as portions experiencing a larger increase of 4.7%.
Rome accounted for nearly 16,000 rentals, a 6% increase, with annual rental costs rising almost 10%. Milan saw over 18,000 new rentals, a 7.4% increase, and rental costs rose by 8.3%. In Rome, short-term standard rental contracts increased by 7.6%, while Milan experienced a slight decrease of 1.5%. Subsidized contracts saw increases in both cities, with Rome rising 9% and Milan experiencing a substantial increase of 88.3% in new rentals, impacting rental rates. Student housing also grew in both cities, particularly in Milan.
