The cost of housing in new developments in Italy has fallen for the first time in eight years, while the secondary market has continued to grow. This indicates a polarization of the Italian real estate market: buyer demand remains strong, but new properties are becoming more sensitive to construction costs, mortgage conditions, and regional differences.
According to Global Property Guide, citing statistics from the European Central Bank, prices for new housing in Italy fell by 1.16% year-over-year, or by 2.29% when adjusted for inflation. This marked the first annual decline in prices for new-build properties in eight years. At the same time, prices for existing homes rose by 5.15% year-over-year, or by 3.95% in real terms.
This gap indicates that the market is responding to different factors. The secondary housing market is supported by limited supply, demand in major cities, and buyer interest in completed properties. New-build properties, on the other hand, are more heavily influenced by construction costs, completion dates, mortgage rates, and buyers’ purchasing power.
According to idealista, in April 2026, the average price of existing housing in Italy rose by 0.8% month-over-month, reaching €1,906 per square meter. On an annual basis, growth was 5%, and 2.7% for the quarter. This confirms that the decline in the new-construction segment does not signify a general downturn in the entire Italian real estate market.
The situation also reflects a structural problem in the Italian market: the supply of new housing remains limited, while demand is concentrated in the strongest locations—Milan, Rome, tourist regions, and cities with a high quality of life.
For buyers, falling prices for new-build properties may open a window of opportunity, especially in regions where developers are willing to make concessions. However, in Italy’s most sought-after cities, housing affordability remains a challenge. The Guardian noted that in Milan, real estate prices have risen by 38% over five years, and the city is becoming a magnet for wealthy foreigners thanks to tax incentives and quality of life.
For foreign buyers, the Italian market remains attractive thanks to a combination of quality of life, tourism potential, tax regimes for new residents, and a wide selection of properties—from city apartments to homes in small towns.
However, the new-construction segment is becoming more heterogeneous: in some regions, prices may fall due to weak demand, while in others, they remain high due to a shortage of modern properties.
