Italian property market 2026, Nomisma: the sector remains resilient amid a challenging economic environment

In a market characterised by moderate growth, Elena Molignoni, Head of Real Estate at Nomisma, analyses evolving housing needs and the outlook for 2027, amid interest rates, access to credit and household purchasing power.

Let's start with residential property transactions. In the first quarter of 2026, the residential property market recorded growth of 4.4% compared with the same period in 2025, while transaction volumes remained broadly stable in the second quarter (+0.1%). How do you interpret this trend, and what can we expect in the final part of the year?

The results for the first half of 2026 confirm the resilience of the residential property market, despite a macroeconomic environment that remains complex.

Following the 4.4% growth recorded in the first quarter, the substantial stabilisation seen in the second quarter should be viewed as part of a period of moderate growth that began in the second half of 2024, rather than as an early sign of a reversal in the trend.

Uncertainty surrounding geopolitical tensions, the risk of further increases in energy and raw material costs, and the potential return of inflationary pressures is encouraging households to remain cautious. For now, however, these factors do not appear to have undermined housing demand, which continues to play an important role in stabilising the market.

We therefore expect this moderate and gradual growth to continue in the second half of the year. Rather than an acceleration in transaction volumes, we anticipate a market that should remain in positive territory, supported by the continued resilience of housing demand.

In your latest Real Estate Report, published in July, you describe demand as still present but increasingly selective. How should we interpret this definition? And how are the needs and behaviours of homebuyers changing?

Describing demand as still present but more selective means, first and foremost, recognising that Italians remain strongly interested in buying a home, but that their decisions are now heavily influenced by purchasing power, property quality, family circumstances and labour market conditions.

A significant indication comes from home purchase intentions: the proportion of households reporting a "definite" or "probable" intention to buy a home rose from 2.5% in the first half of 2025 to 8.5% in the first half of 2026. Demand has therefore not disappeared; it has become more considered, cautious and focused on the financial sustainability of the investment.

The characteristics of demand are also changing. Demographic trends – from an ageing population to the growth of single-person households and the decline in households with children – are driving interest towards smaller homes and alternative housing solutions, such as student housing, senior housing and co-living, alongside growing attention to the rental market.

However, supply is not adapting at the same pace. The construction of new homes remains limited, while regulatory constraints make the redevelopment of existing properties more complex and time-consuming.

The real challenge in the coming years will therefore be to align supply with emerging social and demographic needs, making homes available that are more affordable, efficient and suited to new household structures. Demand is there, but today's buyers are looking for a different type of home and, above all, one that is more financially sustainable.

The property market is also affected by the international economic environment. Inflation, energy prices and the real value of incomes: how do these factors collectively influence Italians' decisions to buy and sell property?

The international economic environment affects the property market primarily through household purchasing power and people's sense of financial security about the future.

Inflation, rising energy costs and declining real incomes make households more cautious when deciding whether to buy a home, encouraging them to assess more carefully the financial sustainability of their investment and their ability to meet housing-related costs over time.

Nevertheless, homeownership continues to represent both a fundamental need and a cornerstone of financial security and wealth preservation for Italians.

The real issue, therefore, is the growing difficulty of turning the desire to buy a home into a concrete possibility. Today, only 35.8% of households consider their income sufficient to cover essential expenses, while 18.5% regard it as barely sufficient or inadequate. This situation is creating an increasingly evident gap between the vitality of the property market and the financial capacity of households.

Following the ECB's interest rate increase on 10 September, you highlighted that the effects of this change on property transactions tend to emerge several months later. Why does the property market react with this delay, and what outlook can we expect for 2027?

Recent developments in the Italian property market provide the answer! The effects of changes in interest rates on the property market are not immediate because buying a home is a complex decision that takes time and often depends on access to credit.

A change in the cost of borrowing must first be reflected in the financing conditions offered by banks and then influence households' decisions. For this reason, the impact on mortgages, purchasing power and, consequently, property transaction volumes tends to emerge several months later.

The 25-basis-point increase decided by the ECB on 10 September should therefore also be considered from this perspective. In a period characterised by high uncertainty, with upside risks to inflation and downside risks to economic growth, households naturally tend to adopt a more cautious approach and, where possible, postpone major financial commitments, such as buying a home.

Looking ahead to 2027, it will therefore be important to monitor not only interest rate trends but, above all, their impact on access to credit and household confidence. If borrowing costs remain high or increase further, we could see more selective demand and greater caution in home purchase decisions.

Property condition, quality and energy performance: how important are these factors in property transactions? According to your analysis, which types of properties could have the strongest growth prospects in the coming years

The condition of a property, its overall quality and energy performance are becoming increasingly important factors in purchasing decisions.

Today, buyers are looking beyond location and price to consider the overall cost of living in a home. An energy-efficient, well-maintained property with good construction quality offers greater assurance in terms of both comfort and long-term cost sustainability. Looking ahead, we believe these are the characteristics that offer the strongest prospects.

Another segment with promising prospects is that of smaller homes that can adapt to demographic changes and evolving lifestyles.