Gross rental yields in Italy are low
Residential Valuation Specialist | August 14, 2018
|Last Updated: Aug. 14, 2018|
|ROME - Historical Centre Apartments||COST (€)||YIELD (p.a.)||PRICE/SQ.M. (€)|
|TO BUY||MONTHLY RENT||TO BUY||MONTHLY RENT|
|50 sq. m.||347,850||1,295||4.47%||6,957||25.90|
|120 sq. m.||790,680||2,584||3.92%||6,589||21.53|
|180 sq. m.||1,266,840||3,910||3.70%||7,038||21.72|
|300 sq. m.||2,419,500||8,808||4.37%||8,065||29.36|
|ROME - nearby suburbs apartments|
|150 sq. m.||687,750||2,288||3.99%||4,585||15.25|
|120 sq. m.||695,280||2,198||3.79%||5,794||18.32|
|MILAN - Historical Centre apartments|
|50 sq. m.||449,250||1,376||3.67%||8,985||27.51|
|120 sq. m.||1,002,600||2,837||3.40%||8,355||23.64|
|300 sq. m.||3,704,400||6,933||2.25%||12,348||23.11|
|MILAN - nearby suburbs apartments|
|50 sq. m.||377,250||1,203||3.83%||7,545||24.05|
|120 sq. m.||846,840||2,671||3.79%||7,057||22.26|
|50 sq. m.||333,900||1,435||5.16%||6,678||28.70|
|120 sq. m.||922,680||2,717||3.53%||7,689||22.64|
|VENICE - apartments|
|50 sq. m.||319,200||974||3.66%||6,384||19.47|
|100 sq. m.||611,700||1,993||3.91%||6,117||19.93|
|100 sq. m.||542,600||1,701||3.76%||5,426||17.01|
|VENICE - apartments|
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you´ll really earn) are typically around 1.5% to 2% lower.
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.