The Italian property market never stands still, and neither do we. This updated July 2025 outlook brings you the very latest insights from the first six months of the year, packed with fresh data, emerging trends, and expert analysis to keep you fully informed.
From soaring demand in southern hotspots to new incentives for buyers and shifting market dynamics, we cover everything you need to know to make a confident, well‑timed move. Whether you’re dreaming of a Tuscan farmhouse or a Sicilian sea view, this report ensures you’re equipped with the facts to act strategically in 2025.
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Italy property market overview 2025 - July update
Rome: Eternal city where history, culture, and investment opportunities collide for international property buyers
Italy’s property market remains firmly on an upward track in 2025. ISTAT reported a +4.4% year-on-year increase in house prices in Q1, with existing home values rising +4.9%. Transaction volumes also demonstrated strengthening momentum, up +11.2% in Q1 compared to Q4 2024.
According to Immobiliare.it, average asking prices nationwide were approximately €2,110/m² in June - marking a +1.8% annual increase and the highest level in two years. Kyero data aligns closely, showing a national average of €2,104/m², with significant regional contrast - €948/m² in Calabria versus over €4,986/m² in Milan. This disparity highlights exceptional value-for-money opportunities, especially in southern Italy.
Milan continues to lead urban markets, with prices around €4,986-€5,400/m², while Rome averages €3,124/m², up +3–3.4% on the year. Florence holds firm at €4,331/m² with +6.1% growth, reflecting steady demand from both domestic and foreign buyers.
Foreign investment remains a strong catalyst. The Italian Revenue Agency estimates that non-resident buyers now represent 12–15% of residential transactions, while commercial real estate saw €2.7 billion in Q1 investment - 44% higher than Q1 2024, with foreign investors accounting for roughly 60% of deals.
Meanwhile, mortgage conditions have improved following ECB rate cuts. Italy’s average mortgage rate fell to 3.2%–3.8% in mid‑2025, boosting affordability. This combination of stable price growth, robust sales volumes, accessible finance, and foreign buyer engagement paints a compelling picture for those considering Italian property.
Louise Dell, Kyero Co‑Founder says: “Mid‑2025 offers a unique window for foreign buyers. With measured price growth, widening regional opportunities, especially in the south, and favourable mortgage conditions, this is a strategically smart time to enter the Italian property market.”
Italy's 2025 economic outlook
Taormina: Sicilian clifftop paradise offering dramatic views and Mediterranean living for discerning investors
Italy enters the second half of 2025 with a solid economic performance and a political landscape that remains supportive of foreign property investment. Inflation is contained, averaging 1.6–1.7%, keeping purchasing power steady for international buyers. Economic growth, though modest, continues on a positive trajectory, with GDP expected to expand by 0.6–0.7% this year. Infrastructure investment, particularly in southern regions, is helping to unlock new areas for residential and commercial activity, and the EU Recovery Fund remains a key driver of regional development.
At the monetary level, the European Central Bank’s rate cuts since mid‑2024 have lowered borrowing costs, improving access to finance for foreign buyers seeking mortgages. This has encouraged renewed interest in mid-market and premium segments, particularly in northern cities and coastal destinations.
Politically, Italy’s centre‑right government under Prime Minister Giorgia Meloni maintains a stable majority and has outlined clear priorities around economic growth, tax reform, and revitalising underpopulated areas. Initiatives such as property tax incentives for non-residents and continued support for the €1 house schemes in rural towns align with the broader strategy to attract foreign capital and skills to revitalise historic communities.
For international buyers, this environment presents a favourable mix: a resilient economy, predictable governance, and a wide spectrum of price points across the country. From high-demand areas like Milan and Florence to emerging southern markets in Calabria and Sicily, Italy offers opportunities for both lifestyle seekers and investors.
Where to buy property in Italy 2025
Sanremo: Liguria's coastal gem attracting international buyers with Belle Époque elegance and sea views
While Rome continues to hold the top spot as Italy’s most popular city for foreign buyers, its share of demand has softened slightly, down 18.5% compared to early 2025. Tuscany’s Lucca has also seen a modest decline in interest (-18.8%), suggesting some buyers are looking beyond the traditional hotspots.
Southern and coastal regions are emerging as clear growth areas. Scalea in Calabria leads the way, with buyer interest rising by an impressive 132% since January. Sicily’s Giuliana (+268%) and Chiusa Sclafani (+749%) have also surged in popularity, reflecting a wider trend towards affordable properties in southern Italy.
Top 10 cities in Italy for foreign buyers - July 2025:
At a provincial level, Imperia (Liguria) and Palermo (Sicily) are seeing strong demand, with total users up 26.4% and 68.3% respectively.
The gap between Italy’s most and least expensive cities remains stark. In Liguria, Sanremo (€182,500) and Ventimiglia (€160,000) continue to attract high-end buyers. At the other end of the scale, Sicily dominates the most affordable list, with towns such as Palazzo Adriano (€17,800) and Chiusa Sclafani (€25,000) offering remarkable value.
Where do different nationalities buy property in Italy?
Lucca: Tuscany's walled wonder - Renaissance charm meets an accessible property market for European buyers
Each nationality has its romance with different corners of Italy. 🇺🇸 Americans love the Renaissance magic of Florence, coastal stunners like Sanremo and Scalea, and Lucca's walkable streets that feel like you’re living inside a postcard. 🇬🇧 British buyers also love Lucca's Tuscan charms, but they also favour the bargain prices and laidback island life of Sicily. 🇩🇪 Germans tend to gravitate towards the coast in provinces like Imperia, as well as water paradises such as Verbano Cusio Ossola, and the ultimate water paradise: Venice.
🇫🇷 The French meanwhile, like to keep it close to home and tend to buy in border-hugging beauties like Imperia and Ventimiglia, but they also love Sicily and favour the historic grandeur of Siracusa. 🇳🇱 As for Dutch buyers? They're the market's wild cards, yes they love Rome and Tuscany, but they also have a particular penchant for southern up and comers Apulia and Ostuni.
Latest Italian property market news buyers should be aware of
Lake Como: Global elite's alpine playground, offering legendary lakeside living and prestigious property investments
1. New rules for second homes and holiday rentals From January 2025, short‑term rental properties (affitti brevi) must display a unique national identification code (CIN), and the use of key‑box self‑check‑ins has been banned. Violations may lead to fines, and local authorities are enforcing tighter registration and taxation rules. These changes aim to balance tourist accommodation with community housing needs and promote transparent ownership structures.
2. Higher taxation on second homes Second homes in Italy are clearly differentiated: buyers face a 9% registration tax, VAT, cadastral and mortgage levies, and must pay IMU (municipal property tax). There’s no move toward extreme taxes (e.g., the 100% taxes Spain and Portugal are introducing), but ownership costs remain significant. Foreign buyers need to plan for these obligations early to avoid surprises.
3. The €1 house phenomenon continues - and spreads Italy’s famous €1 house scheme is still very active in 2025. Municipalities across Sicily, Sardinia, Tuscany,Liguria, Puglia, and even parts of northern Italy continue offering symbolic‑price homes, often close to the coast, and attracting foreign buyers drawn to the combination of heritage restoration and affordability.
4. Northern Italian grants rival €1 homes Some alpine areas are offering up to €20,000 in purchase grants, plus up to €80,000 towards renovations, in ski‑resort towns like Vermiglio in Trentino. Buyers commit to living in or renting the properties for at least 10 years, an appealing, lower‑risk alternative to €1‑homes schemes.
5. Renovations remain strategically smart moves Even with the Superbonus rate reduced to 65%, the Eco‑bonus at 50% continues to drive a wave of renovation activity. Many sellers rush to complete upgrades before deductions fall further, creating a growing stock of energy‑efficient, modernised homes, perfect for buyers seeking turnkey options with green credentials.
Outlook for the rest of 2025
Siracusa: UNESCO World Heritage site where ancient history meets affordable Mediterranean property investments
Italy’s property market in mid-2025 is like a well-stirred risotto – warm, inviting, and full of flavour, with opportunities bubbling up across every region.
Foreign interest is growing, transaction volumes remain healthy, and prices are rising steadily – particularly in regions offering a mix of lifestyle appeal and value.
From Sicily’s affordable charm to Liguria’s luxury coastal homes, buyers are spoilt for choice. Government incentives and €1 home schemes continue to attract headlines, but savvy buyers are also looking at regional renovation grants and favourable tax regimes as ways to stretch their budgets further.
“Italy is offering more than just romance and views in 2025 – it’s a smart move for buyers ready to act,” says Martin Dell, Kyero Co-founder. “With incentives and demand aligning, the second half of the year could be the ideal moment to buy.”
Five smart moves for buyers right now
1. Explore all your options. €1 homes aren’t the only deal – renovation-ready properties and tax breaks are everywhere.
2. Focus your search. Decide whether you're drawn to the coast, countryside, or city life – each region has unique rules and rhythms.
3. Understand local incentives. From renovation grants to low flat taxes for new residents, Italy’s perks vary by location.
4. Partner with trusted pros. A local agent and legal advisor will make navigating Italy’s famously complex system much smoother.
5. Get your paperwork ready. Whether you're applying for residency or just house-hunting, being prepared puts you ahead of the pack.
With prices rising steadily and incentives still on the table, the second half of 2025 is shaping up to be a golden window for buyers ready to claim their slice of la dolce vita. Buona fortuna e buoni affari!
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