Milan, Italy: Demand for new buildings in outer urban areas is skyrocketing

High interest in real estate is leading to the city's expansion and rising prices 

Up to 21,000 euros per square meter in the center

The recently published “Market Report for Residential Property in Milan second half year 2021” by Engel & Völkers, highlights an extraordinarily strong recovery of the real estate market since summer 2020. With the revival of the economy since the pandemic, aided by substantial funds from the National Recovery and Resilience Plan, the interest in buying real estate properties has increased and has also led to an improvement in housing conditions: from renovations to new developments. “In Milan, a gradual but significant recovery of the rental market is expected in all areas of the city, while sales and prices are forecasted to grow further, stimulated by strong demand,” explains Marco Sorbara, Sales Manager of Engel & Völkers Milan. 

Hamburg - Milan, Italy: Demand for new buildings in outer urban areas is skyrocketing

Strong development of new luxury buildings in semi-central areas

The prime segment in Milan is experiencing a great momentum. Most of the new high-end real estate developments are arising in urban areas located outside the third circle (the road ring that until the end of the second world war has roughly delimited the maximum urban extension of the city), contributing to the enlargement of the city of fashion. The emerging zones include to the west Gambara-Bande Nere and Lorenteggio, with renewed interest in the locality of San Siro, in the southern quadrant Corso Lodi and Porta Vittoria, and to the east Città Studi as well as Indipendenza-viale Argonne. The northern part continues to grow in the NoLo (Nord di Loreto) and Isola areas, as well as in Bovisa, due to new developments. “Most of the modern and luxurious new developments in Milan are located in the emerging areas outside the third circle due to greater comfort and space,” says Roberto Magaglio, Licence Partner of Engel & Völkers Milan. “Those buying in the arising districts are made up of young, averagely well-off families, who will contribute to the economic and social growth of these new micro-areas that are destined to become increasingly developed and sought-after,” he concludes. 

Property prices are soaring

Properties in the historic center are considered a risk-free investment, especially for non-local clients, while residents invest in the outside areas. International buyers coming from France, UK and USA, who make up 10 percent of the clientele, still favor buying in the city center. Property prices in the historic center range between 8,000 to 15,000 euros per square meter for renovated apartments and reach a peak of 6.9 million euros for houses in Cinque Vie, a small district in the heart of Milan. The maximum prices in Milan command 21,000 euros per square meter (an increase, compared to 19,000 euros in the first half of 2021) for flats in the central neighborhoods of Quadrilatero, Brera and Castello-Foro Buonaparte. San Babila, Duomo and Cordusio are also considered high-end areas with prices reaching up to 18,000 euros per square meter for refurbished apartments. To the west, around the highly requested modern residential, commercial and business district of City Life, prices have increased ranging between 7,700 and 14,500 euros per square meter (up to 13,000 euros in the first half of 2021).

Outlook: Demand will continue to rise

Engel & Völkers predicts an increase in consideration by investors and developers beyond the border of the third ring road, especially in the southern area, in which the railway of Porta Romana is currently being redeveloped and where the next Olympic Village for the 2026 Winter Olympics will be built. “Homes with more than 120 square meters featuring a terrace or a garden will record an increase in value due to the high demand,” concludes Roberto Magaglio.

Further information about the residential property market in Milan can be found (in English, starting at page 37) in the “ Market Report for Residential Property in Milan second half year 2021,” published by Engel & Völkers.

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