Real estate investments are experiencing a steady increase, driven by stable returns that demonstrate gradual yet consistent growth over the years. The appreciation of property values has become a widespread trend, with double and triple-digit increases occurring in almost all regions over the past 25 years.
According to an analysis conducted by the Research Office of the Tecnocasa Group, in the first half of 2023, 19.6% of real estate transactions were made for investment purposes. This figure represents a slight increase compared to the same period the previous year, when the percentage was around 16.8%. Rising inflation is prompting more and more people to invest in bricks and mortar, traditionally considered an excellent form of investment.
The return of tourists has also contributed to revitalizing the real estate market, with an increase in purchases of properties intended for accommodation in both popular cities and tourist destinations. The analysis primarily focuses on the long-term rental market rather than seasonal rentals. The prospect of earning steady rental income induces greater caution among property owners, especially considering the current economic uncertainty and rising energy costs. However, annual rental yields remain attractive, with an average rate of around 5.2% for two-bedroom apartments of 65 square meters in major Italian cities. Among the metropolises, Genoa, Palermo, and Verona stand out for the highest yields, at 6.6%, 6.4%, and 6.3%, respectively.
Real estate investors are not only aiming for rental income but also for the growth in property value over time. In recent years, there has been a recovery in property prices, with a preference for areas characterized by the presence of universities, services, and urban redevelopment projects. Fabiana Megliola, head of the Research Office at Tecnocasa, emphasized that real estate investors are interested not only in rental returns but also and above all in the appreciation of the property value over time. Between 1998 and 2023, major Italian cities saw an average price increase of 46%. Milan recorded the highest appreciation, with an increase of 132.1%, followed by Naples with 72.1% and Florence with 71.2%.
Source: Sole24Ore