Despite a high-profile judicial scandal in its financial capital, Italy’s property market is emerging as Europe’s surprising growth engine for 2026.
According to new forecasts from Scenari Immobiliari, transaction volumes in Italy are projected to rise by 8.4% this year to €175.8 billion, driven by political stability and a “regulatory clean-up.”
📊 THE GROWTH LEADERBOARD (2026 Forecast): Italy is bucking the sluggish continental trend:
- 🇮🇹 Italy: +8.4%
- 🇪🇸 Spain: +7.0%
- 🇬🇧 UK: +6.6%
- 🇩🇪 Germany: +4.1%
- 🇫🇷 France: +3.2%
⚖️ THE MILAN SCANDAL: A Blessing in Disguise? The 2024 investigations into fast-tracked building permits froze over 100 projects in Milan, raising fears of a foreign capital exodus.
- The Reality: The flight didn’t happen. Davide Dalmiglio (CEO, Savills Italy) notes that while due diligence is now at levels “never seen in 25 years,” investors remain committed.
- The Silver Lining: Developers like Manfredi Catella (CEO, Coima) argue that the judicial review has established stricter, clearer rules, effectively removing regulatory uncertainty—the market’s biggest enemy.
🏗️ THE SUPPLY CRUNCH RISK: The hangover from the scandal is physical, not financial.
- New Builds: Accounted for only 10% of total transactions in 2025 (down from the 15% historical average).
- Gridlock: With mid-sized regeneration projects stalled by cautious public administrators, a severe supply shortage is looming.
💡 ANALYST TAKEAWAY: The Milan scandal has inadvertently created a “Scarcity Premium.” With 4,100 families still waiting for frozen apartments and urban regeneration slowing, the lack of new supply will likely put upward pressure on prices for high-quality, existing assets. Combined with the short-term boost from the February 2026 Winter Olympics, Milan remains a “Buy” for patient capital that can navigate the new, stricter permitting landscape.
👇 European Investors: Does the “Regulatory Cleanup” in Milan make the market more attractive long-term, or does the permitting gridlock kill the development case?