Real estate, market to rise in 2025: first home purchases at 73 per cent

As market operators are well aware, the concept of 'first home' has complex rules that - under certain conditions - allow the discount to be replicated or even used by a family member. Only recently has the Supreme Court clarified what happens if the dwelling already owned by the buyer is no longer suitable for his needs. It cannot be excluded, therefore, that some 'first homes' are village residences or purchases for investment. And there is no shortage of paradoxical effects, such as that whereby having acquired bare ownership with the discount inhibits further purchases of the 'full' right.

In short, more than ten years after the 2014 restyling of purchase taxes - with the reduction of the registration fee from 3 to 2% on the first home - the time would be ripe for a reorganisation of the benefit and, more generally, of the levy on purchases, also to avoid unintended distorting effects.

While it is true that thecutting of interest rates has been the fuel for the market recovery - at least since the second quarter of last year - the same Omi data describing the leap in 'first home' sales are making some creaking noises. After two quarters in which buying and selling grew more in the provincial capitals than in the rest of the municipalities, between April and June this year the smaller towns overtook them, recording a better figure (+8.4% year-on-year versus +7.2%).

The slowdown in growth in the capital cities is significant because here 30.8% of deeds are concluded. The other sign of attention is the slight increase in the average interest rates of new contracts: 3.28% is well below the average 4.25% at the end of 2023, but in the first quarter of this year the rate had stopped at 3.22%.

The increase in sales, certified by the Omi data in the second quarter - due to more favourable lending conditions - translated into a less intense growth in house sales prices than in the past and, often, into their substantial stability.

According to Nomisma, in the first half of 2025 the average price of housing increased overall in the main Italian cities, compared to the same period in 2024. From +3.8% in Rome to +3.2% in Palermo to increases of 2.6-2.8% in Florence and Bologna. The most expensive city, Milan, declined by 1.3%.

The picture for new construction was more mixed: prices rose the most in Florence (+4.2%), Palermo (+2.6%) and Bologna (+2.3%). Falling were Genoa (-1%), Milan (-0.9%) and Turin (-0.4%). "It seems to us that the maximum rebound has passed," explained Chiara Pelizzoni, senior project manager at Nomisma. "In the first quarter the number of purchases and sales had jumped by 11%, a sign of a demand that had been compressed for many months and then exploded with the loosening of mortgage rates. In the second quarter there is growth, but it is of less intensity'.

As for the price forecasts for 2026, continues the Nomisma analyst, "estimates based on the average price per square metre of new homes and those to be renovated, in the centre, semi-centre and suburbs, reveal the same slow pace, with a greater rebound in Rome, Florence and Palermo, and a substantial hold in Milan, whose values are already at their highest and whose further growth risks not being absorbed by the market".

Instead, the outlook by Scenari immobiliari predicts a strong recovery in 2026, "almost a boom": after a 2025 that is expected to end with a turnover of more than 162 billion euro (+6.8 per cent on 2024), estimates point to a new leap to more than 170 billion (+8.4 per cent). If 2025 will end with around 770,000 homes sold, 800,000 are expected next year, with prices rising above 4 per cent almost everywhere.

"From the indicators on purchases and sales," explains Luca Dondi, CEO of Patrigest and expert in the sector, "a solid recovery in demand emerges, but the high use of first home subsidies also reveals a quality, namely the presence of a less affluent demand, with weaker purchasing power. The fall in rates has in fact freed up all that grey area that was waiting to buy but did not have access to the market. It is, however, a demand that expresses an income fragility. That is why we cannot expect very strong price dynamics'.

In addition, there is another effect. On the supply side, 'the slowdown of residential building sites in Milan will lead to a reduction in medium-high-end product, which should contain the inflationary dynamics,' explains Dondi. 'There could be a diversification effect, a search for homes in other destinations. But also the risk of a shift in the flow of investments from Italy to foreign countries'.