The Italian property market in 2023

Italian cities and towns have seen their appeal grow considerably since the pandemic: among the many reasons – besides the beauty of the area – are the country’s innovative flat tax and the fact that, after the lock-down, remote working opportunities have increased remarkably, allowing people to work wherever they want.

Among the reasons of interest is the flat tax

The Italian flat tax is highly regarded by high-end foreign buyers

Most of the people interested in coming to Italy to live (either permanently or temporarily) come from abroad and belong the category of the so-called HNWI (High Net Worth Individuals, people whose net worth exceeds USD one million) or the UHNWI (Ultra High Net Worth Individuals, whose estimated net worth exceeds USD 30 million, including their primary residence).

Even today, the economic consequences of the COVID-19 pandemic are forcing governments to keep taxes raised. In this scenario, the policies adopted by Italy are of great interest to wealthy residents of other countries wishing to purchase a home on the peninsula: the Italian flat tax is structured in such a way as to require a fixed tax of EUR 100,000 per year on foreign income from those who choose to take up residence in Italy.

This measure, aimed at increasing the interest of wealthy foreign nationals in Italian investments, seems to be having the desired effects: more and more UHNWIs are seeking to buy one or more properties in Italy to live or to rent out.

If you want to learn more, you can read the article on the Italian flat tax on our blog.

The Italian real estate market trend

The figures for 2023 confirm an ongoing trend, as shown by Knight Frank’s research centre analysis.

According to the data, Sardinia ranks as the most sought-after destination in 2022, followed by the area near Lake Como and by Florence.

If over 80% of Italian real estate agents state that, compared to previous years, negotiation prices remain stable or are on the rise, the data also show that the time needed to sell remains low compared to historic levels. A positive trend, therefore, in both directions.

In 2022, the average price increase in the main Italian real estate markets was found to be 6.5%, while the global average increase was around 5%. In contrast, the percentage of sales at or above the asking price was over 11%. In addition to these figures, studies show that 65% of the properties were purchased on a mortgage.

This tendency confirms the upward trend already observed in previous years: in the two-year period 2019-2021, a 22% increase in sales was recorded in the sphere of luxury properties. Statistical data confirm a steady increase in prices also for 2023, but with a probably lower growth rate, as a natural consequence of the decreasing demand for real estate following the end of the pandemic emergency.

But what are the main market targets in Italy for wealthy foreign buyers? There is a growing interest in newly built houses, despite the fact that Italy is not typically associated with buildings of contemporary design. In a property built from scratch, the buyer is looking for energy efficiency, state-of-the-art technology, enhanced security and, in general, a range of comforts common in a modern home. Making all this compatible with the traditional aesthetics typical of Italian houses makes the final product very interesting to those coming to Italy to buy a house.

Lifestyle monitor: a look at Italian living

Let’s discover which are the most popular cities and why

Among the things to pay attention to when viewing a new area in which to buy a house may be the quality of life in general, also its accessibility, its history or the cultural heritage it has to offer. Italy is generally associated with a lifestyle that guarantees well-being: let’s take a detailed look at how the main Italian cities rank according to the various decision factors taken into consideration.

We can see how Rome, the most popular destination in general, is also the city of the greatest affluence, most easily accessible, and almost at the top of the rankings in terms of quality of life and culture. The city offering the most opportunities from the point of view of sport and leisure is Genoa, while Florence tops the list of cities rich in history and culture. According to the analysis, Siena is the Italian city with the best quality of life. Worthy of note is the fact that, in the overall ranking, two Tuscan cities, namely Florence and Pisa, are actually in the first four positions. Broadening the view over the entire top 10, we also find Lucca and Siena.

It is therefore not surprising that in Tuscany, just as in much of the peninsula, the demand for houses (and in particular luxury homes) is steadily increasing. The trend has been growing for a number of years and the favourite locations of wealthy foreigners are Florence, Lucca and the Chianti area.

Lucca in particular saw a record number of sales in 2022, leading to an 8% increase in the price of property for sale. What are the characteristics of this city that most attract buyers? Certainly it is a beautiful city to live in or visit: in addition to the historic centre rich in culture, the province of Lucca is characterized by a varied territory, capable of meeting anyone’s tastes. Moreover, its logistical position allows it to be well connected with the main cultural centres of the region, including Pisa and Florence.

To learn more about the province of Lucca and the real estate market in Tuscany, download our in-depth study.

The data collected confirm that the Italian luxury real estate market will maintain a positive trend also in 2023. The territory as a whole is a pleasant destination and the offer of prestigious houses and estates is wide in every location: living in Italy or renting out purchased properties represents a safe investment for foreign buyers.

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