Italy real estate market outlook 2025: A comprehensive guide for international buyers

Current market snapshot

The Italian property market staged an impressive comeback last year from its 2023 slump. Over 700,000 residential transactions were recorded - the third-highest volume since 2011, according to the Rexer Real Estate Observatory. This rebound follows a 9% decline in 2023, proving that much like a well-aged Barolo, the Italian market only gets better with time.

Prices are climbing, too. ISTAT reports a 2.94% rise in the national house price index in Q2 2024, while Immobiliare.it noted a 4.6% average price increase in Q3 2024 alongside a 27% surge in property demand. This gradual pace of growth actually presents an advantage for foreign buyers - prices aren't shooting up dramatically, allowing time for careful property selection and negotiation. As a result of all this, foreign property buyers are showing renewed confidence in the market, driven by broader economic recovery and investment. 

Louise Dell, Kyero Co-Founder says: "2025 presents a remarkable window of opportunity for foreign property buyers in Italy. With stabilising economic conditions, declining interest rates, and emerging markets offering exceptional value, this is a moment where strategic investors can truly unlock the potential of the Italian property market."

Italy economic forecast for 2025

 The European Commission predicts Italian GDP growth of 1.0% in 2025, driven by domestic demand and supported by a strengthening labour market. Inflation is forecasted to rise to just 1.9%, while the deficit is set to fall below 3% of GDP, which will help to continue to stabilise construction costs and property values. While housing tax credits are being phased out, robust economic conditions and increased consumer spending have created a favourable environment for the real estate industry.

The most significant development for foreign buyers has been the steady decline in interest rates, which reached 3.25% in October 2024. This reduction has already begun to spark renewed interest in the market, particularly among domestic buyers who had been sitting on the fence. For foreign buyers, especially those from outside the EU, this creates an interesting window of opportunity before domestic demand potentially drives prices higher.

Where to buy property in Italy 2025

 Buckle up, property hunters. If you think Italian real estate is just about ticking the Rome-Tuscany box, you're about to get schooled. Sure, Rome will always be the golden child of the Italian property market - no surprises there. And yes, Tuscany continues to bewitch international buyers faster than you can say "under the Tuscan sun". But here's the insider intel: the smart money is looking beyond the obvious.

While everyone else is fighting over Florentine farmhouses, savvy buyers are quietly snapping up tumbledown villages in Liguria and hidden alpine gems in the Dolomites. Read on to find out where foreign property buyers are buying in Italy in 2025.

Most popular locations for foreign buyers to buy property in Italy, according to Kyero’s 2024 data: 

Where do different nationalities buy property in Italy? 

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 of course, 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. 

The price is right: Where your Euro goes further

Italy's property market is like a delicious lasagna - layered with complexity and regional flavours. At the top end, you've got eye-watering prices in Milan (€4,988 per sq.m), Venice (€4,529 per sq.m), and Rome (€3,036 per sq.m). But scroll down to Calabria, and suddenly you're looking at seaside properties that cost less than a fancy weekend in Paris.

Emerging hotspots that should be on your radar

If you're looking to be ahead of the curve, pay attention to these rising stars:

Noto: Saw a jaw-dropping 40.65% growth in property searches in 2024
Siracusa: Mediterranean magic with 32.69% growth in property searches
Scalea: Coastal charm with interest increasing by 31.55% in 2024
Genoa: The unexpected cool kid, growing 30.83% in 2024
Ventimiglia: Borderin' on perfection with 30.7% growth in property searches last year.

The post-pandemic property twist

Remember when everyone wanted to be in the city centre? Those days are long gone. Post-covid, buyers are hunting for quieter locations with easy access to nature. Regions like Umbria and Marche are suddenly the cool kids at the real estate party. And they just happen to offer some of Italy's best property bargains. 

The south of Italy's rising appeal

Southern Italy is experiencing a renaissance, largely thanks to the rise of remote work. The combination of lower prices and improving infrastructure has made the South increasingly attractive to both domestic and international buyers. Plus, let's be honest - who wouldn't want to work from a terrace overlooking the Mediterranean?

News & trends affecting the Italian property market in 2025

Tax incentives and digital nomad visa: Welcoming foreign buyers

The Italian government has quietly been taking steps to make it easier for foreign nationals to invest and settle in the country. The introduction of the digital nomad visa in April 2024 was a game-changer, attracting remote workers seeking the Italian lifestyle. New and improved tax incentives also play a key role. These are the tax incentives you should know about:

• Flat-rate tax: New residents can opt to pay a €200,000 flat tax on global income, valid for 15 years.

• Reduced taxes on primary residences: Registration tax for primary homes is as low as 2% of cadastral value.

• Superbonus for renovations: Up to 110% tax deductions for eco-friendly upgrades, though this scheme is set to be scaled back in 2025.

These measures, coupled with regional tax incentives, make Italy an attractive destination for high-net-worth individuals, retirees, and digital nomads.

The Super Bonus scheme is changing in 2025

One of the most significant changes affecting the market is the evolution of Italy's Super Bonus scheme. Originally offering a generous 110% tax credit for energy-efficient renovations, the scheme will be reduced to 65% in 2025. While this might seem like a negative development, it's creating some interesting dynamics in the market. We're seeing an increase in properties that have already undergone renovation hitting the market, as domestic owners look to complete works while the higher rates still apply. For foreign buyers, this could mean more opportunities to purchase recently renovated properties in 2025.

The €1 home phenomenon continues… 

Yes, Italy's famous €1 home scheme continues to expand. In 2024, several new municipalities joined the program, including:

• Caltagirone (a UNESCO World Heritage Site)
• Troina
• Cattolica Eraclea

However, potential buyers should note that insurance deposits range from €1,000 to €5,000, renovation plans must be submitted to town councils for approval, work typically needs to be completed within three years, and renovation costs can be substantial. So while there are bargains to be had, you’ll still need a substantial sum to pay for renovation costs, and you are given a limited time to carry out the works. 

Italian property market predictions for 2025

Geographic shifts

The north-south divide in Italy's property market is expected to narrow slightly in 2025, though not dramatically. While northern and central regions will maintain their leadership in transaction volume, we're seeing increasingly compelling reasons for foreign buyers to look south. This is where you’ll find some serious property bargains. Plus, the continuation of remote work policies globally has turned southern Italy's perceived weaknesses - distance from business centres and transport hubs - into strengths; the region offers ifestyle appeal, combined with decent digital connectivity.

Price trajectories

The projected national average property price growth of 2.3% (according to Immobiliare.it Insights) tells only part of the story. We're seeing emerging micro-markets where growth could significantly exceed this average. Cities like Verona, Genoa, and Bologna are particularly worth watching, with projected growth rates of 6-7% suggesting these markets are undergoing significant transformation.

The American factor

An interesting development we're watching closely is the surge in American interest in Italian property. Following the 2024 U.S. presidential election, Kyero observed an 88% increase in U.S.-based users browsing Italian property listings. This trend could significantly impact certain market segments, particularly in areas that traditionally appeal to American buyers such as Tuscany and the Amalfi Coast.

New build sector continues to grow

The new build sector's 9.8% growth through 2024 is expected to continue into 2025, driven by increasing demand for energy-efficient homes that comply with the European Green Homes directive. This trend is particularly relevant for foreign buyers who may be looking for properties that can generate rental income, as these newer properties typically command premium rents and attract quality tenants.

The rise of renovations

Small town renovation projects are emerging as an increasingly sophisticated market segment, moving beyond the headline-grabbing €1 home schemes. We're seeing the development of more structured renovation opportunities in smaller towns, often with better infrastructure and support for foreign buyers than the basic €1 scheme currently offers. Watch this space for more information!

Strategic recommendations for foreign property buyers

For those buyers looking to enter the Italian market in 2025, timing and location will be crucial. The early part of the year could present a sweet spot, as the market adjusts to the reduced Super Bonus scheme and before any potential summer price increases in popular tourist areas.

Location-wise, we're particularly keen on three types of locations:

• Up-and-coming cities: Verona, Genoa, and Bologna offer a compelling combination of cultural appeal, economic stability, and growth potential. These cities provide many of the lifestyle benefits of Milan or Rome at significantly lower price points.
• Southern comfort: Calabria and other southern regions offer extraordinary value, particularly for remote workers. The key is to focus on areas with good internet infrastructure and transport links.
• Mountain and coastal premium locations: Despite higher prices, locations like Cortina d'Ampezzo, and coastal areas such as Forte dei Marmi continue to show strong investment potential, particularly in the luxury segment.

Note: The reduction in the Super Bonus scheme might create some market adjustment in early 2025, potentially offering negotiating opportunities, particularly for properties that might have missed the higher rate deadline. 

Conclusion

So, foreign buyers, the Italian property buffet is open. Will you play it safe with a Roman classic, chase bargains in Sicily's sun-baked streets, or get contemplative in Marche's rolling hills? Perhaps you're dreaming of a Dolomites cabin where your only neighbours are alpine goats and your investment portfolio? The 2025 Italian property market is a choose-your-own-adventure novel - and the plot looks promising. Stop daydreaming and start searching: discover your slice of Italian real estate magic right now.