Luxury real estate in Rome: the market shows no signs of crisis

Freepik

6 July 2023, 14:32

Rome is the eleventh most sought-after location in the world for the super-rich who want a luxury home. This is according to the Barnes Index City 2023, the annual report of the French real estate company, which shows that demand for luxury properties - in the Italian capital in particular - outstrips supply, with properties on the market being sold in less than a week. What makes Rome so special? This is everything you need to know about luxury real estate in Rome, the market that shows no signs of crisis.

The luxury real estate market in Italy

According to Barnes, after a strong rebound to +6.7% in 2021 and +3.7% in 2022, Italian growth is expected to reach +0.3% by the end of 2023. Despite, however, the ever-increasing demand, especially from foreign nationals (mainly from France and the United States), the difficulty lies in the supply, which contributes to keeping prices high:

"The expertise of the agents, combined with a marketing strategy that has been increasingly fine-tuned to the target market, has allowed us to sell properties on average in less than a week, sometimes even off-market, but right now the search is focused on homes that can be offered to buyers from all over the world," - comments Giovanni Gargano, CEO Managing Partner of BARNES Rome. "Due to short-term rentals, which had experienced a lull during the pandemic, it is becoming increasingly difficult for a property to be put on the market, with the risk that, as is the case nowadays, supply will not be able to satisfy demand. This is why we are always on the lookout for luxury homes that can satisfy our clients and increasingly position Barnes as a leader in search and purchase."

Why Rome is loved by the super rich

In terms of budget, BARNES Index City 2023 estimated that the super-rich spend an average of 5 million on their second home. Among the most sought-after property types in the historic centre of Rome are penthouses with terraces, which give a panoramic view over the eternal city and allow owners to enjoy a large outdoor space. Also increasingly in demand is the location in the historic centre and adjacent neighbourhoods, together with the type of residence, which reflects high quality standards and spaciousness. Rome also attracts many LGBTQ couples from all over the world, with high incomes and no children, with a preponderance from America and Northern Europe.

"Real estate transactions in 2023 will be around 600,000: one of the big challenges for the coming years will be the energy efficiency of housing, which is currently a central concern for buyers, difficult to implement in historic buildings." concludes Gargano.

The cities most in demand by luxury buyers

The Barnes City Index 2023 sees the top 5 most sought-after cities in the world by high-spending buyers comprising Paris, Miami, New York, Austin and Dubai. Ultra High-Net-Worth Individuals (UHNWIs) are defined as those with at least $30 million in net worth. This population dropped by 6 per cent annually as of June 2022, to a total of 392,410 ultra-wealthy worldwide, and saw wealth drop by 11 per cent over the same period, to an average of $41.8 trillion, still a considerable sum.

The Barnes City Index 2023 is based on practical, emotional and financial criteria in 2022 and is a direct reflection of the profound changes that have taken place over the past three years. At the top of the ranking are five cities that have reassured investors during this period of uncertainty: in addition to Paris at the top of the list, three American metropolises rank 2nd, 3rd and 4th for their economic strength: Miami (Florida), New York (New York) and Austin (Texas). In 5th place is Dubai, which joins the small club of global safe havens, mainly due to its attractiveness to entrepreneurs and expatriate families.

Among traditional safe havens, London (UK) is in 7th place, ahead of Geneva (Switzerland), Madrid (Spain), Milan and Rome (Italy), confirming a certain bipolarity in this ranking between North America and Europe. Tokyo (Japan) stands alone in 6th position. The new cities popular with the rich are Istanbul, Barcelona, Athens, Tel Aviv, Doha, Abu Dhabi and Florence. They enter the Cities Index in 12th, 21st, 33rd, 35th, 39th, 45th and 46th place respectively.