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Milan: Demand for rental properties at all-time high

Engel & Völkers has published its latest report on the Milan real estate market for the first half of 2023. Despite a decline in transaction numbers of almost 23 percent compared to the previous year, the global real estate company registered stable market development in the north Italian city, with price increases of up to 14 percent over the same half-year in 2022 as well as a significantly increased interest in rental apartments.

“Looking at the current market climate, we are generally optimistic. Milan’s residential sector has seen very dynamic developments over the last six months – with new challenges and opportunities. The strong surge in short-term rentals is striking. In view of the booming events and tourism industry, and thinking forward to the 2026 Milan-Cortina Winter Olympics, this trend is set to dominate the market in the medium to long term,” says
Tomaso Aguzzi, CEO of Engel & Völkers Italy.

Price development: Rising prices in almost all top locations across Milan

Compared to the previous year, price increases were registered in almost all locations across Milan. The highest priced area of the Italian fashion mecca remains the Quadrilatero designer district, where the top price per square metre for exclusive properties reached 24,000 euros in the first half of 2023, marking an increase of some 14 percent over the previous year. The central, historic districts of San Babila, Brera and Castello-Foro Bonaparte also saw price increases averaging five percent year-on-year in the first six months. Besides the historic centre, the west of the city is also sought-after as a place to live, especially the Citylife residential district, which has a reputation for being home to well-known personalities like the Italian entrepreneur and influencer Chiara Ferragni. Prices per square metre here remain at a stable high, peaking at as much as 15,000 euros.

Trend analysis: Rental demand overtakes buying interest

Milan’s international importance as a centre of finance and fashion historically makes the city an attractive residential and investment location on both a domestic and international level. The Engel & Völkers market report reveals that rental demand has overtaken buying interest in the last six months. Due to the recovery of the tourism and events industry to pre-pandemic levels, there has been a particularly sharp rise in demand for short-term rentals. This demand is presenting many owners of renovated properties or new builds with the most attractive ROI opportunities at present. The strong demand and limited supply have seen rental prices for properties in very good condition in Milan’s top locations rise by an average of eight percent in the first half of 2023 compared to the same period in the previous year, reaching as much as 480 euros per square metre per year in the upper segment.

Outlook: Stable market situation with continuing high demand for rental properties

For the remainder of this year, Engel & Völkers expects the trends that impacted the Milan real estate market in the first half of the year to continue. “Property prices will continue to flatline at a high level, with sporadic price rises in very good locations. Interest in refurbished properties and new builds will continue to increase, due in part to people’s growing focus on energy efficiency”, Tomaso Aguzzi concludes. At the same time, the excess demand for rental properties is not set to ease at any time soon and a further correction down of transactions on the buyer’s market is to be expected.


Detailed information can be found in the full “Engel & Völkers Market Report Milan H1 2023”.

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- Overview Price Level Development H1 2023 (c) Engel & Völkers
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