Exclusive Residences Observatory - I semester 2025 - Press Release
WAITING FOR GODOT...
DEMAND SLOWS DOWN AND SUPPLY GROWS
Buying and selling: a two-speed market
The market for exclusive residences in Milan confirms the trend that emerged at the end of 2024: clear distinction between the Top and Luxury segments (over 3 and 6million, respectively), supported by international demand, and the Medium segment (1-3 million), predominantly domestic and characterized by considerable prudence.
Inquiries from foreign families coming to Milan, mainly for reasons of tax convenience, are confirmed, although the trend shows a significant slowdown after a record 2024. Supply in these niches is always very limited and fueled by divestments sometimes at speculative prices.
The average absorption index drops slightly, the time required to complete a purchase or sale is lengthened to 7.6 months, and the gap between asking value and actual price increases, reaching 8.1 percent.
This dynamic reflects the prevailing weight of the less dynamic Medium segment (1-3 million), while the performance of the upper two segments is better.
Asking prices show moderate rises, with an increase of 0.66 percent for the average price and +0.93 percent for the average top price. The city's average top price is also growing in this semester, but much more moderately than before, with a differentiated trend among the various zones: it is growing in Brera, Magenta and the Other Zones, while it is declining in the Quadrilateral, Historic Center and Venice-Duse.
Leases:demand settling
Rental demand has settled or reduced in all ranges: Medium (40-90k plus expenses), Top (90-170k plus expenses) and Luxury (€ 170k+ plus expenses). The supply of residences with high aesthetic profile and strong scenic impact remains extremely limited, as most of the best solutions have already been intercepted by those who moved to Milan in 2023 and 2024.
Rental values show moderate growth, with an average increase of 0.46 percent. Top rents, i.e., the maximum rent per square meter of an individual home, have reached exceptional thresholds: over 700 euros throughout Milan, with record highs of up to 1,100 euros in the Quadrilateral.
IN DETAIL.
Purchases and sales
In the first half of 2025, the market for exclusive residences in Milan confirms the trend that emerged at the end of 2024: clear distinction between the Top (over 3million) and Luxury (over 6 million) brackets, supported by international demand , and the Medium (1-3 million) bracket, predominantly domestic and characterized by considerable prudence.
Inquiries from foreign families coming to Milan, mainly for reasons of tax convenience, are confirmed, although the trend shows a significant slowdown after a record 2024. Supply in these niches is always very limited and fueled by divestments sometimes at speculative prices.
"In the mid-range, buyers are almost exclusively Italian, and their purchasing decisions are much less 'impulsive' than in other segments," comments Gabriele Torchiani, senior partner and head of ORE. " They are thoughtful decisions, and this is due to a number of concomitant factors:
- difficulty in finding properties that represent a real qualitative leap from one's current home;
- some disorientation about the real value of available properties, induced on the one hand by the great variability in asking prices for seemingly similar houses, and on the other hand by the increase on real estate portals of ads showing even significant price decreases;
- a wait-and-see attitude associated with the increasing complexity of the overall geopolitical picture that fosters an anxious and often pessimistic view of the future."
The average absorption index-which measures the share of properties sold out of the total offered-falls slightly to 19.6 percent, a drop of about half a percentage point. The picture, however, is not uniform: some areas such as the Quadrilateral and Porta Venezia show positive signs, bucking the city average.
Quality homes continue to intercept a buyer fairly quickly, while less compelling ones remain unsold for a long time. Indeed, demand today in Milan is not prone to compromise.
The average time it takes to complete a purchase or sale is still getting longer, again exceeding the seven-month mark and standing at 7.6, a level that recalls that of 2019. At the same time, the discount grows further, reaching 8.1 percent (+0.9 percent in the six-month period).
This dynamic reflects the prevailing weight of the medium segment, which is less dynamic, while the performance of the Top and Luxury segment is better, and the few high-quality properties record significantly lower-than-average sales times and discounts.
Against this backdrop, the average stock of unsold properties is also growing, returning to over 26 months. This is a very high level, which should prompt owners to make clear decisions: withdraw the property from the market or accept a significant price reduction. In reality, however, many properties remain suspended in a stalemate.
Asking prices also show moderate rises this semester, with a 0.66% increase for the average price and +0.93% for the median-maximum price. The average price of used (average condition or for renovation) grows by 1.17%, more than new (renovated or new construction), which registers +0.29%. This is an "optical" effect generated simply by the circumstance that many more new homes were placed in the first segment during the six-month period than in the other two.
Top prices (maximum price per sq. m. recorded by a single unit) show a differentiated trend in the semester among the various areas: it is growing in Brera, Magenta and theOther Zones, while it is declining in the Quadrilateral, Historic Center and Venice-Duse. While the growth is an indicator that new houses have entered the market compared to the previous six-month period, the decline can be attributed to the exit from the market of the most prestigious units and the failure to replace them with others of equal or higher quality.
The city's average Top price (average of the Top prices of the 6 surveyed zones) is also growing this semester at €27,658 (+3.2%), but more moderately than in the past.
The total amount of the three largest sales in the six-month period stands at nearly 23 million, with sales prices ranging from a low of 18,200 to a high of nearly 21,000 per square meter.
The "first home" component rises to 55 percent, the "replacement" portion is worth 38 percent of the total, and the investment portion falls to 7 percent, somewhat penalized by the very positive performance of alternative asset classes such as the stock market or gold.
"Foreign investors' interest in Milan remains high, despite the peak of those from the United Kingdom in the past two semesters, due to the repeal of the benefits of the UK Res non-dom tax regime ," says Marco E. Tirelli. "The adjustment of the flat tax to 200,000 euros has not generated significant changes in the flow of requests, either from Europe or from the rest of the world. On the other hand, the flow of requests from the United States is growing, fueled not by tax convenience (U.S. citizens are in fact subject to Federal Tax even if they are nonresidents), when by the strong concern about the political trend in their country.
The leases
During the six-month period, demand for rental housing settled or declined in all brackets: Medium(40-90k plus expenses), Top (90-170k plus expenses) and Luxury (€ 170k+ plus expenses).The market in the top two brackets is fueled both by direct demand coming largely from foreigners and expats, and by so-called "bridging demand" i.e., those who, unable to find a home to buy, temporarily turn to the rental market. However, the total number of applicants in the six-month period was lower than in the previous two years.
"L'offer of residences with a high aesthetic profile and strong scenic impact remains extremely limited, as most of the best solutions have already been intercepted by those who moved to Milan in 2023 and 2024," Torchiani adds. "Even in the mid-range, supply has shrunk and is struggling to keep up with demand - even if demand is less bright than in the past. As a result, rents remain under pressure, even with fewer contracts signed."
In the six months just ended, the absorptionindex showed a widespread contraction across all monitored areas, with an average retreat of 2 percent bringing the absorption index to 34.8 percent.
The slowdown reflects less frenzied demand in the higher ranges and is affected-particularly in the Middle range-by the unattractiveness of apartments located in unrenovated buildings, which are increasingly unattractive to selective, quality-conscious users.
The average time needed to rent a property has lengthened slightly to4.2 months (+0.7). At the same time, the discount on the required rent is also growing, now at 5.8 percent (+1.3 percent in the six-month period), a sign of an overall supply that is losing quality. For homes in the Medium range if the contract is not closed within 3-4 months, the reduction in the rent can exceed 10%.Finally, the average time of storage of empty apartments grows significantly, now approaching 10 months.
Rental values continue along a moderate growth trajectory, marking an average increase of 0.46 percent in the first quarter of 2025. Top rents (maximum rent per square meter of a single home), have reached exceptional thresholds:over 700 euros throughout Milan, with record highs of up to 1,100 euros in the Quadrilateral. Supporting this dynamic are the scarcity of supply, the presence on the market of international tenants, already accustomed to paying similar amounts in their markets, and of course the exceptional quality level of the residences in question.
International tenants now account for about a third of overall demand. In theLuxury segment, which covers residences over 300 m², the presence of foreigners and expats who have returned to Italy is now almost exclusive.
Forecast for the second half of 2025
BUY SELLS: In the Medium segment, fueled almost exclusively by domestic demand, buying and selling volumes will not be able to have increases mainly due to issues related to the general geopolitical-economic climate, which certainly does not fuel optimism, the primary cause of investment decisions.
Even in the Top and Luxury ranges, which are mainly linked to foreign demand attracted by tax benefits, volumes are expected to be stable as they mainly depend on the availability of new supply, which will remain centered in the next six months as well. In a real estate market characterized by the freeze on new construction related to the well-known judicial events, the secondary market represents the main source of demand satisfaction. Senonché the chronic insufficiency of supply undermines the possibilities of increasing the number of transactions.
Further increases in asking prices appear likely, but given the limited number of transactions in the segment, such increases will not change the overall averages.
Considering the overall picture, the key factor affecting market performance in the second half of the year will again be the availability of quality residences.
LETTINGS: Demand for rentals will remain at current levels. The sector will also continue to be the landing place for those looking for temporary housing while waiting to find a home to buy.However, limited supply will continue to restrain the actual number of contracts, especially at the higher end of the market. On the rent front, a continuation of the moderate growth trend is expected.