The rise in inflation shows no signa of slowing down and will weigh heavily on tenants with annual rent reviews in Italy. Istat has published an update of Italy's inflation index (FOI) for June 2022, showing that inflation is up by as much as 7.8% year-on-year. The cost of living crisis is worsening in Italy, and this is how inflation continues to increase rental prices in Italy.
The effect on rent is tangible and will lead to an average increase of 55 euros per month (660 per year) in the case of renting a 3-room apartment. Milan households will have to pay 80 euros more per month compared to last year, while for tenants in Rome, the increase will be 63 euros.
This is what emerges from an analysis carried out by idealista, Italy's leading portal for technological development, which has calculated how much the increase in inflation will affect the adjustment of rental contracts for a 3-room apartment based on the updated Consumer Price Index published by Istat. The increase in inflation directly affects rental contracts linked to the FOI index, i.e. those with the 4+4 duration formula.
The report focused on the average rent asked for in property listings for 3-room apartments for rent published on idealista. This property type was chosen specifically because it is the one most popular in Italy, especially for families, the category on which the increase in inflation weighs most heavily. In Italy, the average monthly rent for a 3-room apartment was 704 euros per month in June 2021. Tenants who have the annual adjustment calculated with the FOI inflation index of June 2022 will therefore have to pay 55 euro more per month.
The situation, however, varies greatly depending on the city taken into consideration (the report focused only on Italy's main cities and not on provinces due to a much larger database). The tenants who will see the greatest increase in rents are those in Milan (+80 euros per month and 960 euros more per year). There are also significant increases for those living in a 3-room apartment in Bolzano, where it will cost 70 euros more per month (840 euros more per year) to rent property.
Tenants in Rome are not much better off (63 euros more per month and 756 per year). The monthly increase will be 61 euros in both Bologna and Florence, while in Como the adjustment of rents to the inflation index will also be felt (+50 euro per month).
The city in Southern Italy that will record the most considerable increases in rents for 3-room apartments is Cagliari (+53 euros), followed closely by Naples (+51 euros).
By contrast, rent adjustments will weigh least heavily on tenants in Isernia (+€20 per month). More generally, moderate increases (no more than 27 euros per month) are recorded in the main towns of Chieti, Biella, Vibo Valentia, Asti, Enna, Terni, Caltanissetta, Ragusa and Lanusei.
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