Buying a house in Milan is 25.5% more expensive than in Rome

In Italy, almost all turnover in the real estate sector comes from the sale of residential property. Buying a house in Milan is 25.5% more expensive than in Rome, say the latest data from the Sigest Study Centre.

Real estate turnover in Italy

According to the study from the research arm of the real estate group based on data from OMI, the residential real estate market in Italy witnessed about 580 thousand property transactions in 2018. These generated a turnover of 94.3 billion euros out of a total of 103.2 billion. Compared to the previous year, residential turnover increased by 5.2%.

Turnover in 2018 also grew by 2.6% in Milan and by 0.9% in Rome. In particular, the 7.7 billion euros that changed hands in Milan more or less equals the turnover of the entire domestic corporate market, which is worth 8.8 billion euros. The latter market in Milan is worth 3.1 billion euros, down by 16% compared to last year and which instead has a peak of growth of 24% in Rome, where it has a value of 1.9 billion euros.

Real estate prices in Milan and Rome

With regard to sales prices in these two Italian cities, in Italy in 2018 they were 1,538 euros per square metre (143 euros per square foot), slightly down (-1.5%) when compared with 2017. The situation is different if we talk about Rome, where the average price is 2,828 euros/m2 (263 euros/sq ft), and Milan, which is the most expensive city in Italy with an average property price of 3,796 euros/m2 (353 euros/sq ft), slightly up (0.8%) compared with 2017.

"The research confirms the trends which are already underway,” says Francesca Bombelli, head of the Sigest Study Centre, “which show a gradual increase in prices in Milan due to the low availability of properties in the city centre and the selectivity of the city market. Comparing the growth data of real estate sales in Milan in the last 5 years with the data for the same period in large cities and Italian provinces, it is clear that the Milanese market is able to anticipate the trends of the entire country. This predictive effect in relation to the rest of the country could be defined as the ‘long wave of Milan’, even if we will have wait for the data for the second quarter in order to confirm these assumptions.”

A property in Milan is 25.5% more expensive than one of the same size in Rome. Not only that, but the rural province of Milan also has a very high price gap compared with Milan city: buying an apartment in the centre of Milan costs on average 55% more than buying the same apartment elsewhere in the province.

Sigest's analysis sampled about 350 newly built apartments sold in Milan with two, three and four bedrooms, from which emerged an average cost of 5,227 euros/m2 (486 euros/sq ft). This is about 38% more than what the OMI data show, which just goes to show the value of the used properties.

Residential property transactions

If the number of residential real estate transactions in Italy as a whole grew by 6.5% in 2018 compared with the previous year (for a total of 578,647 operations), the situation is slightly different for the areas of Milan and Rome. In the capital, transactions grew by 3% compared with 2017, with three- and four-room apartments growing significantly by 7.4% and 5.5%. In Milan, the number of transactions grew slightly more than in Rome (3.4%) compared with the previous year, although the most interesting fact is the rising number of transactions of studio apartments in Milan city, up to 13.2% more than in 2017.

Considering the most requested property types in Rome and Milan, important differences emerge: if we consider the Rome market (total transactions of 40% for two-room flats and 29% for three-room flats), the best performance for the year is of the three-room apartments (+7.4%) and the worst the one-room apartments (-1.3%). However, in Milan (total transactions of 42% for two-room flats and 21% for three-room flats), the studio apartment (+13.2%) takes first place, while last place belongs to the apartments with more than four rooms (-1.4%).

Real estate market trends in Italy for 2019

"The survey of the residential market in the first quarter of 2019,” says Enzo Albanese of Sigest, “shows a very positive trend both at the national level (+8.8%) and in large cities (+8.2%). In the latter analysis, the markets of Rome and Milan shone particularly well, with variations of +11.9% and +11.3% respectively. However, it should be borne in mind that the OMI data, representing the number of notarial deeds recorded, show a delay of about six months compared to what happens on the market, while those who work there daily have a more up-to-date perception of the facts. Although the phase is certainly positive, we believe that only the second quarter of 2019 will be able to dispel any doubts regarding the trend of the market, and if it has reduced its dynamism as we hypothesised. We await the data that will be published in September by the Agenzia delle Entrate (tax office) in the hopes of being proved wrong.”