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Jul 14, 2017

Gross rental yields in Italy are low


Last Updated: July 14, 2017
ROME - Historical Centre Apartments COST () YIELD (p.a.) PRICE/SQ.M. ()
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
40 sq. m. 317,720 1,001 3.78% 7,943 25.02
120 sq. m. 1,012,680 1,999 2.37% 8,439 16.66
ROME - Historical Centre - other areas
40 sq. m. 277,680 875 3.78% 6,942 21.87
120 sq. m. 625,680 2,020 3.87% 5,214 16.83
MILAN - Historical Centre apartments
50 sq. m. 378,650 1,224 3.88% 7,573 24.48
120 sq. m. 965,640 2,410 2.99% 8,047 20.08
MILAN - Citta Studi
50 sq. m. 192,150 775 4.84% 3,843 15.50
120 sq. m. 389,520 1,478 4.55% 3,246 12.32
Rome Historical Centre: Centro Storico as defined by immobiliare.it
Other areas near Centro Storico: Aventino, Esquilino, Trastevere and San Saba
Milan Historical Centre: Brera and Duomo
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

Gross rental yields in the historical centre of Rome and of Milan - the return earned on the purchase price of a rental property, before taxation, vacancy costs, and other costs - range from 2.4% to 4.5%, with yields in Rome lower than in Milan.  Yields on 120 square metre (sq. m.) apartments are really low, yields on smaller apartments a little better.

Prices of apartments. Apartments in the wealthy suburbs of Rome cost on average between €4,400 to €4,900 per sq. m.. A 120 sq. m. apartment in the suburbs would cost around €4,450 per sq. m.  In the historic centres of Rome and Milan, prices are nearer €8,000 per sq. m.

Conclusion: Property prices in Italy are beginning to look attractive. But gross rental yields are very poor, and Italy’s predatory taxation system doesn’t help.

Round trip transaction costs can be very high on residential property in Italy. See our Italy residential property transaction costs analysis and our Residential property transaction costs in Italy compared to other countries.






Comments

#1 SHERIF | November 21, 2017

Very useful, informative and professional reports. Thank you

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