Market Update: The State of Luxury Real Estate in Rome

According to the Financial Times, real estate prices in the center of Rome fell by 3.4 percent last year. But areas in the city’s suburbs have experienced an uptick in demand, with 50 percent more searches for large apartments with access to outdoor space in December 2020 than in the same period in 2019.

It’s an observation that Massimiliano Bulzoni, managing director of Rome Exclusive, believes holds true. “A few months before the pandemic, the real estate market in Rome was showing signs of recovery, after practically a decade of continuous price falls”—a long-lasting after effect of the 2008 recession, he explains.

“The scenario in early 2019 was therefore very positive. But when COVID-19 hit, Italy was one of the first European countries to be affected. We had two months of hard lockdown, with deserted cities, and offices and businesses completely closed. Forecasts spoke of a real estate market collapse. Instead, we’ve seen a recovery in both sales requests and average market prices.”

Changing Demand

This recovery—which Bulzoni says began last summer and shows no signs of slowing—is due to the fact that “many Romans are changing their real estate needs. And the most evident trend is, of course, the search for liveable outdoor spaces.”

Many people within the Italian capital are still working from home, Bulzoni points out, and he believes that, once the pandemic recedes, most companies are set to adopt a hybrid work model. “Therefore, we’re primarily experiencing a demand for larger homes from families,” he says. “But more and more customers are looking for independent houses or villas that are well connected to the city.”

In the center of Rome, he says, real estate such as “penthouses or apartments in residential areas, with large terraces or gardens” are in high demand. “People want to be able to live in open spaces. without giving up all the convenience of the metropolis—and it’s a trend that’s growing.”

Related: Read our Experts’ Analysis of the Luxury Real Estate Market During the Pandemic

He adds that the lockdown restrictions have had an effect on the broader Italian real estate market, too: an increase in requests for secondary homes. “Demand has risen for homes by the sea or in the mountains. At certain times of the year, these properties can become primary residences for families, given Italian schools’ long summer vacations and the growing possibility of working remotely.”

Foreign Interest

When it comes to international demand for property in the capital, the outlook is positive. “During the pandemic we saw an increase in interest from foreign buyers, which is still ongoing,” Bulzoni says, citing data analysis from online real estate portal Casa.it. “According to their research, searches for properties in Rome worth more than €1 million ($1,200,650) increased by more than 80 percent in the Asia Pacific region; 40 percent in the United States; and 24 percent in areas of Europe such as France, Germany and the United Kingdom.”

He attributes this increased demand to international buyers’ desire to snap up city center properties, which locals may be eschewing in favor of greater outdoor space. “Most international requests are for a property in the historic center, possibly with a terrace or external space,” he explains.

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Investment Opportunities

So where should those looking to invest in Rome’s real estate put their money? “Go for large apartments or entire buildings that have renovation potential and are situated in the historic center or urban area,” Bulzoni says.

“To encourage economic recovery in the construction and real estate industries, the Italian government has offered strong tax concessions for the renovation of houses and buildings,” he explains. “There is a focus on increasing such buildings’ energy efficiency and reducing urban pollution, but these tax bonuses make renovating a property very affordable.”

The Rest of 2021, and Beyond

Bulzoni is optimistic about what the future holds. “We’ve started the year very well—and not only because we recently joined the Christie’s International Real Estate family,” he says. “The real estate market in Rome is very active and we’re confident that our sales revenue will rapidly return to its pre-pandemic level.”

Banner image: The skyline of Rome. Getty Images.