The global economic environment remains resilient but uncertain, with growth supported by stable fundamentals yet constrained by geopolitical tensions and slowing trade. As highlighted in Marketbeats #18 , international indicators show moderate expansion, with global GDP expected to grow around 3% in 2025. However, the persistence of uncertainty—particularly in global trade and energy markets—continues to shape investment decisions and economic expectations.
In Italy, the macroeconomic picture reflects this duality. Economic activity shows signs of softening, with a slight contraction in GDP in the second quarter of 2025 (-0.1% quarter-on-quarter), mainly due to weaker exports and inventory dynamics (page 3). At the same time, domestic demand remains relatively stable, supported by household consumption and a still-solid labor market, where employment continues to grow.
Within this context, the residential real estate market is demonstrating a progressive recovery. Transaction volumes increased significantly in the second quarter of 2025, with an overall growth of 8.1% compared to the same period in 2024 (page 7). This expansion is widespread across both major cities and smaller municipalities, confirming a broad-based improvement in market activity.
Credit conditions continue to play a central role. The share of transactions supported by mortgages remains high, approaching 46%, while average interest rates have stabilized at around 3.3% for first-time buyers. At the same time, the proportion of purchases benefiting from “first home” incentives remains stable at just over 70%, highlighting the continued importance of end-user demand.
However, the recovery is not uniform across segments. New-build transactions show signs of weakness, declining compared to the previous year and representing only around 5–6% of total transactions (page 7). This reflects ongoing supply constraints as well as affordability challenges linked to higher prices and construction costs.
Geographical dynamics further illustrate this rebalancing phase. While overall activity is growing, major cities show mixed performance. As reported on page 8, Milan records a significant decline in new housing transactions in the first half of 2025 (-24.3% year-on-year), while other cities such as Turin and Palermo show positive trends. Rome confirms its central role, becoming the leading market for new housing purchases in the second quarter.
More broadly, the distribution of transactions highlights a shift toward a more diversified market. A substantial share of activity is taking place outside the main metropolitan areas, confirming the growing relevance of secondary cities and suburban markets in meeting housing demand.
At the same time, investment activity remains strong. As discussed in the Scenari Immobiliari Forum (page 6), real estate investments in Italy are expected to exceed €11 billion in 2025, supported by liquidity in capital markets and increasing interest in large-scale transactions. Lombardy continues to play a dominant role, accounting for a significant share of total investments.
In conclusion, Italy’s housing market is entering a phase of consolidation rather than rapid expansion. The combination of improving transaction volumes, stable credit conditions and sustained investment activity provides a solid foundation for growth. However, structural challenges—such as limited new supply, affordability constraints and global uncertainty—are shaping a more selective and balanced market. The evolution of these dynamics will be key in defining the trajectory of the sector in the coming quarters.