Italian housing market booms in 2025, Palermo leads with 26% sales jump

In 2025 Italy’s residential property market recorded a strong rebound, with total home purchases up 6.6% and mortgage loans rising 18.8% nationwide. The surge was not uniform: Palermo posted the sharpest increase at +25.9% (from 9,753 to 12,280 transactions), while Rome, Milan, Turin, Bologna, Naples and other major cities also saw double‑digit gains (Rome +7.8%, Milan +5.6%, Turin +8.9%). Notaries said “the recovery appears widespread, especially driven by first‑home purchases by private individuals,” and highlighted that buyers under 35 constitute the dominant share of both purchasers and mortgage borrowers.

Looking ahead to 2026, industry forecasts temper the optimism. Projected sales growth is only 1‑1.5% for the year, with average prices nudging up about 2%. High price levels in premium urban markets are prompting sellers to lower listing prices, with noticeable discounts reported in Milan, Florence, Bologna and other metros. New‑build units remain a niche, representing roughly 7% of total transactions, while the bulk of activity concentrates on resale properties. The market’s health now hinges on household purchasing power, which remains squeezed by inflation and elevated renovation costs.