Does Milan still have the most expensive rents in Italy?

The Italian real estate market is always in motion, with variations and trends that reflect not only economic dynamics, but also changes in housing needs and preferences of buyers and tenants. According to analyses conducted by Immobiliare.it Insights, based on a predictive algorithm that should have a negligible margin of error, Florence is indeed about to surpass Milan as the city with the highest rents in the country. The analysis of the real estate market in Florence indicates a upward trend in rental prices, while home prices remain relatively stable. According to the study, the average cost of rents per square meter in Milan currently stands at around 24.7 euros. However, forecasts for 2024 indicate a 2% increase, bringing the average cost of rents to around 25 euros per square meter by the end of the year. The average cost of rents per square meter in Florence is about 24.5 euros, and therefore slightly lower, but projections for 2024 foresee a significant increase of 18%, bringing the average cost of rents in Florence to nearly 29 euros per square meter by the end of the year and “beating” Milan as the most expensive city, at least in terms of rents.

There are several reasons behind this trend. Firstly, the growing demand for rentals in Florence, both from residents and tourists, has contributed to driving prices up. Additionally, the scarcity of supply in the rental market has allowed landlords to apply higher prices. The interest of investors in the rental sector has also influenced the increase in prices. Antonio Intini, Chief Business Officer of Immobiliare.it, highlighted another factor in this increase that, in addition to Florence, is also expected to affect Naples: "The rise in mortgage rates and inflation has reduced the intentions and purchasing power of Italians, shifting a portion of demand towards renting, a market that could therefore see prices rise in response to increased interest". In practice, the same economic difficulty that the increase in interest rates has created for those who want to buy a house has pushed a huge portion of consumers towards the rental market, which has now inflated.

Nonetheless, while Milan remains at the top for the highest prices of homes for sale, exceeding 100 euros on average and hovering around 5,500 euros per square meter, the highest in Italy, Florence is emerging as an increasingly popular destination for real estate investments, both in terms of purchases and rentals. As for Milan, however, prices of homes in individual neighborhoods will experience a generalized increase, but those experiencing the greatest increases, both for sale and for rent, will be homes located in the most peripheral areas of the city (such as Melegnano, where rents have grown rapidly), namely those that due to their relative affordability will continue to attract demand. For example, according to the forecasts of Immobiliare.it Insights, in the Ponte Lambro-Santa Giulia area, the sales price will see a growth of 7.8%, while that of rent will see an 8.6% growth. Even for Bisceglie-Baggio-Olmi, forecasts for rental costs speak of a +11.8%, and for sales of a +5%.