Looking to invest in real estate? Perhaps it’s better to focus on properties in the outskirts rather than the heart of the city. This is the main conclusion of a study conducted by Immobiliare.it exclusively for Repubblica Milano, which examined the gross profitability of various city areas. Experts compared the average selling prices of properties in each neighborhood with market rents, providing an insight into potential real estate investments.
The study results indicate that the most cost-effective area for real estate investments includes Bisceglie, Baggio, and Olmi. In these areas, the average cost of a home (mainly studios or small one-bedroom apartments) is approximately €165,400, with average monthly rents amounting to €950. This translates to an average annual yield of 7.38%, surpassing the citywide average of 5.01%. In second place is the Ponte Lambro-Santa Giulia macroarea, offering an average yield of 6.7%. The third spot goes to the Affori-Bovisa area with 6.62%. Conversely, the Arco della Pace-Arena-Pagano area has an average yield of 3.45%, even lower than the Garibaldi-Moscova-Porta Nuova area at 3.49%. “By purchasing a one-bedroom apartment in the areas outside the 90/91 circular line, the price is nearly 50% lower compared to a property in a central city location (€230,000 versus €430,000)”, explains Antonio Intini, Chief Business Officer of Immobiliare.it. “Furthermore, the rental differential decreases to 25% (€1,100 versus €1,480).
This is primarily due to two factors: on one hand, the rental market is more responsive to socioeconomic changes compared to property transactions, and in a city like Milan, with various attractive areas, growth affects the entire territory. On the other hand, not owning the property often pushes renters to seek alternative solutions if rents in the central and desirable areas exceed their budget, while when purchasing, the choice of location remains a significant factor,” adds the expert.