Italy

House prices in Italy have continued to fall over the past year. Prices of houses in Italy’s 13 biggest cities fell by 3.4% in the 12 months through September, according to Nomisma.

In the historical centre of Rome, average prices per square metre (sq. m.) of apartments have dropped by as much as 11% during the year to June 2012, according to our latest survey. Apartments now cost on average EUR 6,500 per sq. m. whereas in the previous year, apartments cost on average EUR 7,400.

A 120 sq. m. apartment in Rome’s historical centre can now be bought for around EUR 6,300 per sq. m. from around EUR 7,200 per sq. m. “If someone is interested, he can find a lot of opportunities right now.” said Mr. Vittorio Barbera, a law partner at Barbera & Associati in Rome who specializes in real estate transactions.

The slump is attributed to a number of factors, including the euro zone crisis and austerity measures like higher property taxes.

The Monti government has introduced a new tax called Imposta Municipale Unica (IMU), or in English, the Local Property Tax.

Apartments in the wealthy suburbs of Rome cost on average between EUR 5,000 to EUR 6,000 per square metre (sq. m.) A 120 sq. m. apartment in the suburbs would cost around EUR 5,000 per sq. m.

Apartments in the prime areas of Milan are more expensive. Milan apartment prices ranges from EUR 5,400 per sq. m. to EUR 8,000 per sq. m. A 120 sq. m. apartment in Milan would cost on average EUR 6,000 per sq. m.

Apartment rents are the highest in Rome’s historical centre, followed by Milan, then lastly, by Rome suburbs.

In the historical centre of Rome, monthly rents per sq. m. range from EUR 21 to EUR 26, which means that you can rent a 120 sq. m. apartment here for around EUR 2,600 per month.

In Milan, monthly rents per sq. m. range from EUR 16 to EUR 20. You have to shell out around EUR 1,900 per month if you want to rent a 120 sq. m. apartment.

In the suburbs of Rome, rents range from EUR 15 to EUR 19 per sq. m. per month. A 120 sq. m. apartment could be rented for around EUR 1,800 per month.

Gross rental yields on apartments in Rome and Milan are poor. Larger apartments return very poor rental yields compared with smaller apartments. This is true in either of the two cities.

Gross rental yields on apartments in Rome’s historical centre ranges from 3.80% (200 sq. m.) to 4.66% (50 sq. m.).

In the suburbs, rental yields range from 2.99% (225 sq. m.) to 4.04% (50 sq. m.).

Apartments in Milan return rental yields of between 3.01% (275 sq. m.) to 4.17% (50 sq. m.).