The luxury real estate market is confirming its strength in Italy's two main cities: but how much does a luxury home cost in Milan and Rome and what will luxury property prices in Italy be like in 2022? According to the Engel & Völkers and Nomisma Market Report on Milan and Rome in the second half of 2021, the real estate market consolidated the recovery already started in the summer of 2020, in the first respite granted by the pandemic. Recovery also looks promising for 2022. We have the details.
Prestige properties, crisis-free demand
The economy's ability to rebound, helped by the huge resources associated with the National Recovery and Resilience Plan, represented the macroeconomic prerequisite for the reactivation of the real estate acquisitive impulse, also dictated by the desire to improve living conditions from many Italians. Strong demand pressure will continue to drive price growth in the residential sector, according to the market report. From this point of view, for the market as a whole, among the main Italian cities, Milan continues to occupy the leading role in the national context (+3.6% forecast for 2022 ), followed by Rome (+2.3%).
"The luxury market in the two major Italian cities presents different dynamics, with the sales sector in strong recovery and the leasing sector still lagging behind compared to pre-pandemic levels," stated Luca Dondi dall'Orologio, CEO of Nomisma . The outlook for the first half of 2022 remains positive and consistent with the country's growth, despite the war that's also currently taking place. In Milan, a gradual but significant recovery of the rental market is expected in all areas, while sales and prices are expected to increase further. In Rome, the rental market is expected to continue to recover. Also in Rome, the trend of growth in sales is expected to continue, especially in emerging areas increasingly appreciated by demand, in the presence of stationary prices.
Luxury homes in Milan area by area
Among the prestigious properties in Milan, the prime segment is experiencing a moment of great momentum. Emerging areas include: Gambara-Bande Nere and Lorenteggio to the west, and interest is returning to the San Siro area. Corso Lodi and Porta Vittoria are the areas of greatest interest in the southern quadrant, while the areas of Città Studi and Indipendenza - viale Argonne in the east are home to some new buildings, as well of the Cenisio-Piazza Firenze area which is favoured thanks to the expansion of the transport network.
The city is experiencing a strong horizontal expansion with many of the most sought after properties now in the outskirts and suburbs instead of in the city centre. In terms of prices, there are many luxury properties that are priced well outside the market, regardless of the reference area. Properties in the historic centre are considered a risk-free investment, particularly for non-local investors, while residents invest in other areas, where prices have risen more than in the centre.
How much does a luxury home in Milan cost?
The average prices of properties in the historic centre of Milan range from 8-15 thousand euros/m2 for refurbished and new properties, and from 6-10 thousand euros/m2 for those that need renovation work. Top prices reach 20-21 thousand euros/m2 in the Quadrilatero, Brera and Castello-Foro Buonaparte areas, and 17-18 thousand euros/m2 in San Babila, Duomo and Cordusio. In the western part of the city, average prices range between 5,500 and 8,200 euros/m2 for newly refurbished properties and between 4,400 and 6,300 euros/m2 for those in need of work.
City life prices are outside the range, between 7,700-14,500 euros/m2 and, in the lower range, those of Gambara-Bande Nere, between 4,000-5,600 euros/m2 approximately. As for the east, purchase and sale values are included in the range of 4,000-9,000 euros/m2 for new or refurbished housing, while in the north, prices for new and refurbished housing range between 4,500 and 7,000 euros/m2 in the Central-Loreto and Isola-Gioia-Maggiolina areas. Finally, in the south, prices range from 5,800 euros/m2 in Medaglie d'Oro-Lodi and 10,000 euro/m2in Porta Romana-Crocetta-Quadronno.
Luxury real estate in Rome
In the second half of 2021, the luxury property market in Rome proved to be responsive and characterised by sustained demand. The properties that have seen the strongest demand are refurbished three- and four-room apartments. There was also a slight recovery in the sale of one- and two-room apartments, demand for which had suffered a setback in the first year of the pandemic.
In the historic centre, main home purchases were concentrated primarily in the districts of Trastevere, Esquilino, Ponte, Campo Marzio and Monteverde. Foreign demand, mainly from Northern Europe, is increasing and is oriented towards the prestigious central areas (Ponte, Campo Marzio and Monteverde Vecchio). On the other hand in the Prati-Vatican area, demand for main residences has stagnated, while investors have resumed their interest in properties to be used as short term accommodation. In Prati, in particular, sales are driving the market.
How much does a luxury home cost in Rome?
In the historical centre of Rome, for renovated houses, the average price ranges between 3.000 euros/m2 and 9.000 euros/m2. In the Prati-Vatican area, the range of average prices varies instead between 4,200 and 7,000 euros/m2 for new and refurbished homes. In the northern area, the Nomentano, Bologna and Trieste/Salario districts proved particularly dynamic. Parioli was an exception, where, despite steady demand, a particularly large supply of properties in need of renovation made the market less fluid. There has been a slight increase in purchases for investment in the Nomentano-Bologna and San Lorenzo areas.
In northern Rome, average prices vary between 3,000 and 7,100 euros/m2. The highest quotations are in the Parioli and Trieste/Salario districts with prices of 7,100 and 6,100 eurow/m2 for new or renovated homes. In the west, the most sought-after areas are Monteverde Nuovo and Portuense, both for the purchase of a first home and for investment. Here the values are in the range 2,700-4,000 euros/m2 for new homes and in the range 2,300-3,500 for those that need to be renovated.
Finally, in the southern area, where average prices range from 2,200 euros/m2 in the Laurentino area to 4,800 euros/m2 in San Giovanni/Appio Latino for renovated properties and from 2,100 to 4,300 euros/m2 for those in need of renovation, the greatest interest is in EUR and its vicinity, including the Serafico Torrino and Mostacciano areas. Purchase for investment purposes is still decreasing, while foreign demand is looking for and finding in EUR excellent quality properties and an ideal lifestyle. The Viale Marconi and Montagnola areas also continue to attract interest, followed by Ostiense and Garbatella.
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