Italian real estate

The compact two-room apartment has long been the preferred property type for Milanese buyers, though recent data shows this preference may be gradually shifting

In Italy’s competitive urban housing markets, property preferences reveal distinct regional patterns, with Milan consistently demonstrating its unique position in the national real estate landscape. While most major Italian cities show a clear preference for three-room apartments, Milan continues to march to its own rhythm – though recent data suggests the beginning of a potential shift in buyer behavior.

According to comprehensive market analysis conducted by the Tecnocasa Group Research Office, three-room apartments dominate Italy’s major urban centers, representing 34% of available properties. Four-room units follow at 24%, with two-room apartments constituting 22% of the market share across Italy’s largest cities.

Milan, however, presents a striking exception to this national pattern. The Lombard capital’s housing inventory remains heavily concentrated on two-room apartments, which represent 31% of available properties—though this figure has decreased compared to previous measurements.

This longstanding Milanese preference for compact living spaces stems from multiple market factors. Two-room apartments have historically been the preferred choice for Milan buyers, partly due to their greater prevalence in the market, but also because their smaller square footage translates to more accessible price points in one of Italy’s most expensive real estate markets.

The city’s distinctive preference for more compact living spaces reflects both practical economic considerations and the urban lifestyle preferences of its residents. However, the declining percentage of two-room apartments in the overall market may signal an evolution in buyer preferences or development priorities.

Meanwhile, housing supply constraints continue to shape Milan’s real estate dynamics. The city faces an ongoing shortage in housing inventory, despite continued development of new construction projects that remain attractive to potential buyers who increasingly prioritize newer properties. This supply-demand imbalance creates a two-tiered market where properties requiring significant renovation linger unsold while newer or well-maintained units move quickly.

As new construction projects continue throughout Milan, they respond to clear market signals—buyers strongly prefer newly built properties with modern amenities and energy efficiency features. This preference for new construction is creating further segmentation in the market, with older properties requiring substantial renovation work experiencing extended listing periods.

The city’s housing market continues to reflect Milan’s status as Italy’s financial and fashion capital, where space commands a premium and practical considerations often drive purchasing decisions. Whether the declining percentage of two-room apartments signals a fundamental shift in the market or merely a temporary fluctuation remains to be seen, but it represents an important trend for investors, developers, and prospective buyers to monitor in the coming months.

As Milan evolves, its real estate preferences provide a window into the changing priorities and economic realities of Italy’s most dynamic urban center. While two-room apartments maintain their position as the city’s most prevalent housing type for now, the gradual shift suggests Milan may eventually align more closely with national trends—or perhaps establish entirely new patterns reflecting its unique position in Italy’s urban landscape.

After two years of growth, investment purchases cool slightly while maintaining historically strong levels

The Italian real estate market is showing signs of a subtle directional change in 2024-2025.

Following increases during 2022 and 2023, investment purchases now represent 19% of total transactions, a marginal decrease from 19.5% last year, according to analysis from the Research Department of Gruppo Tecnocasa based on transactions completed by agencies throughout Italy.

Though minimal, this decline represents a cooling signal after two consecutive years of growth. From 2012 to 2022, investment purchases consistently ranged between 16% and 18%, making the current level—despite its decrease—still among the highest recorded between 2012-2024. Historical lows were reached during 2014-2015 and again between 2020-2021, largely due to pandemic effects.

Major Cities Continue Driving Investment Activity

Major metropolitan areas maintain their position as investment hotspots, with investment purchases reaching 28.1% of transactions—slightly down from 28.6% in 2023 but significantly above the national average. Naples leads the 2024 rankings with an impressive 38.9% of purchases made for investment purposes, followed by Palermo (36.0%), Verona (32.2%), Bari (30.5%), and Florence (30.3%). Milan and Bologna both exceed the 28% threshold, while Rome (21.5%) and Turin (21%) complete the rankings.

Property Preferences Evolve as Investors Seek Larger Spaces

Two-room apartments remain investors’ preferred choice, accounting for 32.5% of investment purchases, followed by three-room units at 27.4%. Notably, 2024 has seen increased interest in larger properties (four rooms and above) and independent housing solutions, which grew from 13.2% to 13.8% of investment purchases—signaling renewed interest in more spacious and versatile properties.

Investor Profile: Mid-Career Professionals and Families Lead the Market

The typical investor age remains stable, with the 45-54 bracket being most active (27.7%), followed by 35-44 year-olds (22.6%) and 55-64 year-olds (21.8%). Couples and families dominate the investment market, representing 72.2% of investment buyers. Single investors have declined from 30.6% in 2023 to 27.8% in 2024, reversing the growth trend observed in previous years.

Foreign Investors and Financing Options Gain Ground

Foreign investment in Italian real estate continues to strengthen. While international investors represented only 4.1% of transactions in 2019, they now account for 9.5% in 2024, making a significant contribution to the investment segment.

Cash purchases remain dominant at 85.9% of investment transactions. However, mortgage financing has increased to 14.1%, showing recovery after the 2023 slowdown caused by rising interest rates.