The Italian residential real estate market expanded significantly through 2025, driven by climbing transaction volumes, rising market values, and a substantial rebound in mortgage lending, according to comprehensive data released by the Revenue Agency’s real estate market observatory, the Osservatorio del mercato immobiliare dell’Agenzia delle Entrate, in collaboration with the Italian Banking Association, Associazione Bancaria Italiana (ABI).
Official figures show that the country recorded nearly 767,000 property sales over the course of the year, representing a 6.4% increase compared to 2025 figures from the previous year. Total transaction turnover climbed to approximately €124 billion, marking an 8.8% year-over-year increase that added more than €10 billion to the sector’s overall economic value.
Geographic Distribution of Residential Property Sales
Geographic analysis reveals that the surge in housing transactions touched every region of Italy, though momentum varied sharply by territory. The Northwest of Italy led the country with an 8% increase in residential sales, closely followed by the Central regions, which posted a 7% uptick.
Island markets recorded a 6.8% rise in completed purchases, while the Northeast saw transactions grow by 6.4%. In contrast, Southern Italy experienced a more measured expansion, with sales edging up by just 2.5% over the 12-month period.
Activity within Italy’s eight most populous cities—Rome, Milan, Turin, Naples, Genoa, Palermo, Bologna, and Florence—presented a diverse landscape. Urban transaction growth proved particularly pronounced in Palermo, Turin, and Rome, contrasting with more stable environments in other major metropolitan centers.
Turnover, Mortgage Lending, and Financial Dynamics
Total residential turnover reached roughly €124 billion, with the vast majority of capital concentrating in the northern regions. Properties located in northern Italy accounted for 58% of the national sales turnover, while central regions captured 23.3%. The South and Islands together represented 18.7% of total sales volume.
Roughly a quarter of the total national turnover concentrated within Italy’s eight major cities alone, generating an estimated €31.3 billion in real estate transactions. Transactions involving natural persons backed by mortgage loans accounted for 45.9% of all home purchases, fueled by a sharp recovery in credit deployment.
Total mortgage capital disbursed for residential purchases hit €47.2 billion, representing a 25% increase compared to the prior year. This credit expansion directly influenced market liquidity, enabling a higher volume of buyers to secure financing despite fluctuating property valuations.
Rental Market Trends and Affordability Index
The rental sector experienced parallel shifts during the year, with newly registered residential leases surpassing one million units—a 1.5% increase from the prior year that accounts for nearly 7% of the nation’s available housing stock. While traditional market-rate leases with durations starting at three years declined by 2.4%, subsidized rental contracts operating under the regulated ‘canone concordato’ framework grew by approximately 6%. Total annual rental revenue approached €7 billion, marking a 5.4% increase.
Meanwhile, home purchase affordability remained relatively favorable in historical terms. The national affordability index, or indice di affordability, stood at 12.6%, shifting only slightly from 12.7% in the previous year and remaining well above the long-term historical average of 9.8% recorded between 2004 and 2025.
According to the joint report, this resilience stemmed from two opposing forces: upward pressure from rising property prices, which subtracted 0.4 percentage points from the index, counterbalanced by falling residential mortgage interest rates, which added 0.3 percentage points.
Stakeholders and market participants await the next scheduled official releases from the Revenue Agency and the Italian Banking Association for subsequent quarterly updates on property valuations and credit flows. Readers are encouraged to share their insights or discuss these market findings in the comments below.
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