The global economic environment remains highly uncertain, with geopolitical tensions and shifting policy priorities continuing to impact market dynamics. As highlighted in Marketbeats #16  , inflation across major European economies has stabilized, but growth remains weak and uneven. In the first quarter of 2025, Italy recorded modest GDP growth of around 0.3%, outperforming some European peers but still reflecting a fragile economic context.

This uncertainty is directly reflected in consumer and business confidence. As shown on page 3, both indicators declined in early 2025, with households expressing more negative expectations about the economic outlook and their personal financial situation. This cautious sentiment is further reinforced by a structural issue affecting Italy: stagnant wages. Over the past decades, real salaries have failed to grow, and since 2008 they have even declined in real terms, reducing purchasing power and limiting consumption capacity (page 4).

Despite these constraints, Italian households continue to demonstrate resilience. Data from the Findomestic Observatory (page 5) indicate that, although concerns remain widespread, families are not abandoning their plans. On the contrary, intentions to purchase goods and invest in the home are increasing, suggesting a latent demand that could support future real estate activity.

At the international level, the residential market continues to be characterized by strong polarization. Prime real estate in global cities remains highly valued, with prices in locations such as Monaco, Hong Kong and New York reaching exceptionally high levels (page 6). Monaco, in particular, stands out as a unique case: limited supply and strong global demand have driven transaction volumes and values to record highs, with significant growth in new developments such as the Mareterra project (page 7).

In Italy, the investment landscape is showing encouraging signs. After a period of slowdown, the first quarter of 2025 recorded a strong rebound in real estate investments, which increased by approximately 40% year-on-year, reaching €2.6 billion (page 8). Logistics and office sectors led this recovery, followed by hospitality and retail, while residential prices continued to grow moderately.

Another structural shift concerns housing tenure. Across Europe, the share of households living in rental accommodation is increasing, reflecting changing socio-economic conditions and reduced access to homeownership. As illustrated on page 9, around 30% of European citizens now live in rented housing, a figure that has been gradually rising over the past decade. In Italy, although homeownership remains dominant, this trend is becoming increasingly relevant, particularly in major urban areas.

In conclusion, Italy’s real estate market is evolving within a complex and rapidly changing environment. Global uncertainty, declining purchasing power, and affordability constraints continue to pose challenges. However, the sector also benefits from strong underlying fundamentals, including resilient household behavior, renewed investment activity, and emerging demand patterns such as the growth of the rental market. The ability to adapt to these structural changes will be key to sustaining growth in the coming years.