Transaction volumes climb 7% year-over-year while pricing dynamics reveal shifting market preferences across Italy’s financial capital
Milan’s residential real estate market is closing 2025 on a robust note, recording approximately 12,000 property transactions in the first half of the year—a 7% increase compared to the same period in 2024. The surge marks a decisive end to four consecutive semesters of contraction, according to Nomisma’s latest real estate market observatory report.
Transaction Geography: Core City Dominates
The distribution of deals reflects Milan’s concentric market structure: 53% of transactions occurred within the Milan municipality itself, while 32% took place in first-ring suburban communities and 15% in second-ring areas. This geographic spread underscores continued demand for both urban convenience and suburban affordability.
Pricing Dynamics Show Modest Gains
Price appreciation remains measured but consistent across segments. Newly constructed and fully renovated properties posted a 1% annual increase and 0.4% semester-over-semester gain through mid-2025. The existing housing stock performed similarly, with semester and annual variations of 0.7% and 1%, respectively.
Milan’s supply constraints continue to influence negotiations. Discounts from initial asking prices average 3% for new construction and 7% for existing properties—tighter than national averages. Properties are moving at a steady pace, with average selling times holding at approximately four months.
Rental Market Cools After Years of Growth
The rental sector, long characterized by robust demand, is showing signs of normalization. Annual rent growth has decelerated significantly from the rapid increases of recent years, settling at just 0.8% in the second half of 2025. Standard listing times hover around 2.5 months, though premium properties in high-demand locations continue to lease within days of hitting the market.
This moderation suggests the market may be reaching equilibrium after years of supply-demand imbalance, though competition for well-located units remains fierce.
Commercial Real Estate Faces Headwinds
Milan’s office market presents a contrasting narrative. Transaction volumes declined 10.5% compared to Q1 2024, with 760 deals closing in the first semester of 2025. Pricing pressures are evident across locations: central district valuations dropped 1.9% annually, while business districts saw prices fall 1.1%.
The rental commercial market mirrors these challenges. Peripheral office rents declined 2.7%, with central locations experiencing a more modest 0.8% decrease. These trends reflect evolving workplace dynamics and potential oversupply in certain segments as companies reassess their real estate footprints.
Market Outlook for 2026
As 2025 concludes, Milan’s residential market demonstrates resilience despite broader economic uncertainties. The return to transaction growth, coupled with stable pricing and normalizing rental dynamics, suggests a market finding its footing. However, the commercial sector’s weakness highlights the need for market participants to navigate segment-specific conditions carefully as we head into 2026.
Source: Milan Today
