Italy is once again capturing the attention of global investors. Despite a recent corruption scandal in Milan that shook the real estate sector, market activity is rebounding with confidence, and experts forecast a significant increase in transaction volumes in 2026. According to research firm Scenari Immobiliari, the total value of real estate transactions in Italy is expected to rise by 8.4% to €175.8 billion, positioning the country among the fastest-growing real estate markets in Europe.
The Milan scandal, linked to the accelerated approval of building permits, became one of the most high-profile corruption cases in recent years. Several projects in the city’s prime districts bypassed bureaucratic regulations, sometimes using questionable schemes. Industry analysts predicted that these events could trigger capital flight and halt construction, yet the market responded in an unexpected way.
On the contrary, the crisis acted as a catalyst for stricter regulatory oversight, and newly implemented transparent procedures have created a safer environment for investors. “Investors are seeking predictability and stability,” notes Giulio Rossini, head of the Italian division of the international real estate firm Savills. “With tighter rules in place, many projects have become more attractive, as the risks of hidden issues are now minimized.”
Investment Growth in Key Cities
Milan, Italy’s financial capital, continues to attract the majority of investment capital. In 2026, there is heightened interest in premium residential and commercial properties. Luxury apartments in historic city centers, Class A office complexes, and modern logistics hubs are seeing strong demand from both private investors and institutional funds.
Rome, Florence, and Venice are also showing market growth. In tourist-heavy regions, short-term rental properties remain highly sought after, making investments profitable even amid global economic fluctuations. According to Nomisma, the average price per square meter in major city centers has increased by 5–7% over the past 12 months, with continued high demand for properties offering full amenities and modern infrastructure.
Experts emphasize that price growth is accompanied by improvements in construction quality and the integration of modern technologies. Smart homes, energy-efficient buildings, and projects with green certification are becoming the standard in Italy’s luxury real estate segment. This aligns with a global trend where sustainability and technological innovation are key factors influencing property choice.
Italy Within the European Real Estate Landscape
Italy is strengthening its position amid general stability in the European real estate market. According to Eurostat, investments in European Union real estate showed moderate growth in 2025–2026, but Italy stands out among Southern European countries thanks to its historical value, tourism appeal, and urban dynamism.
The commercial real estate sector in Italy has become particularly attractive to foreign investors. Office buildings, shopping centers, and logistics complexes in Milan, Rome, and Bologna are drawing funds from the United States, the United Kingdom, and the Middle East. Investors view Italian assets as stable portfolio components capable of delivering consistent returns, even amid economic volatility.
Mortgage Availability and Housing Accessibility
Another key factor driving Italy’s real estate market is mortgage accessibility. Low interest rates across the Eurozone have boosted demand for housing, particularly in the mid-range and premium segments. According to Bankitalia, the number of new mortgage agreements in Italy rose by 12% over the past six months, with average rates remaining among the most attractive in Europe.
Affordable mortgages open doors for younger buyers and families who previously could not afford properties in major cities. This, in turn, encourages developers to launch new projects that balance comfort, location, and competitive pricing.
Investment Strategies and Risk Considerations
For investors, Italy offers diverse opportunities. Luxury apartments in historic city centers, office spaces, and logistics facilities are attracting both institutional funds and private capital. Key investors seek properties that provide stable income streams and long-term capital appreciation.
However, risks remain. In some regions, bureaucratic procedures are still complex, and the cost of permits and taxes can significantly impact returns. Despite post-scandal stabilization in Milan, reputational risks and regulatory changes demand careful monitoring.
Marco Bellini, an analyst at Nomisma, explains: “Italy’s real estate market continues to draw capital, but investors must carefully evaluate projects and collaborate with reliable partners. Only then can they achieve returns that meet expectations.”
The Luxury Segment Leads the Recovery
Luxury real estate in Milan, Florence, and Venice is experiencing robust demand. Prime properties—often located in historic palaces or renovated landmark buildings—are attracting high-net-worth individuals seeking both residence and investment value. According to Knight Frank, Milan’s luxury residential market has seen transaction volumes grow by nearly 10% in 2025, signaling confidence among international buyers despite previous market uncertainties.
Developers are responding by launching high-end projects that combine heritage architecture with modern amenities, including smart home systems, energy efficiency, and concierge services. This blend of history and innovation appeals not only to domestic buyers but also to overseas investors from the Middle East, the United States, and Asia.
Sustainability and Technology as Market Drivers
Italian developers are increasingly embracing green building standards and smart technology, in line with European sustainability regulations. Projects certified under LEED or BREEAM standards are now common, especially in Milan and Rome, reflecting a growing investor preference for environmentally responsible assets.
Smart-home integrations, energy-efficient heating systems, and IoT-enabled security are no longer optional—they are becoming baseline expectations for premium properties. This trend enhances both property value and rental yields, making sustainable buildings a key factor in long-term investment strategies.
Outlook for 2026 and Beyond
Looking ahead, the Italian real estate market appears poised for continued growth. Analysts expect steady demand across residential, commercial, and logistics sectors, driven by low mortgage rates, international investor interest, and urban development projects.
The Milan scandal, while initially a source of concern, ultimately strengthened market integrity and investor confidence. “Italy has shown resilience,” notes Rossini of Savills. “Clearer regulations, improved transparency, and continued demand in key cities indicate that the market is not only recovering but entering a sustainable growth phase.”
Investors, developers, and policymakers alike are watching Italy as a case study of how transparency and regulation can coexist with market dynamism. While challenges remain, including regional bureaucratic variations and taxation complexities, Italy’s combination of heritage, urban infrastructure, and international appeal ensures it will remain a top destination for real estate investment in Europe.
