Foreign Demand Shifts Towards Sardinia

Italy’s real estate market is benefiting from strong international demand, with foreign buyers spending €5.5 billion in 2025, the highest level in a decade and 10% above 2024.

Increasingly, that demand is moving beyond Italy’s traditional tourist centres towards villages, rural areas and less-crowded coastlines. Sardinia is one of the clearest beneficiaries of this shift.

Foreign interest is strongest around Olbia, Alghero and Gallura, which account for nearly 7 in 10 international enquiries on the island. Cagliari is also seeing steady growth.

Market fundamentals remain supportive, with transactions up 7.4% in the first half of 2026. Most properties are selling within six months, while limited supply is becoming a bigger constraint than weak demand. 

Buyers Prioritise Authenticity and Lifestyle

International buyers are showing particular interest in country houses with land, especially the traditional Gallura-style stazzo.

The strongest-performing properties typically offer privacy, proximity to the coast, access to Olbia or Alghero airports, and traditional architecture combined with nearby local communities.

This combination is creating a clear premium. In 2025, three out of four homes sold by internationally focused agencies went to foreign buyers, with some paying up to 20% above local market prices for properties matching these preferences.

Germany currently represents the largest share of completed purchases, followed by the United States, Canada and the United Kingdom. Meanwhile, Asian demand remains largely untapped.

Outlook

Sardinia is well positioned as an emerging international property destination, combining an established global reputation with growing transaction activity and relatively limited Asian participation.

For the Juwai IQI network, this creates an early positioning opportunity before Sardinia becomes more widely recognised among Asian buyers.

The strongest prospects are likely to remain in authentic, well-connected lifestyle properties offering privacy, coastal access and long-term residential appeal.

The contents of this article were contributed by Giulia Mattana, Head of IQI Sardinia Italy.

The post Sardinia Property Market 2026: Foreign Buyers Drive Italy’s Next Emerging Hotspot appeared first on IQI Blog.

Residential Momentum Remains Strong

Italy’s housing market entered the second half of 2026 with solid momentum. House prices increased 5.2% year-on-year in Q1 2026, supported by stronger transaction activity and improving demand.

New-build prices rose 6.7%, while existing homes gained 4.8%. Residential sales also increased 4.4% year-on-year, with total transactions forecast to grow by approximately 8.4% across 2026.

Price growth remained concentrated in major cities. Milan led with a 6.3% increase, followed by Rome at 5.0% and Turin at 3.6%. National asking prices averaged €2,188 per square metre in April.

However, the financing environment has become less supportive. The European Central Bank raised its deposit rate to 2.25% in June 2026, weakening the lower-cost mortgage conditions that supported the earlier recovery. 

Quality Assets Continue to Attract Capital

Higher interest rates have not significantly reduced demand for premium assets. Commercial property investment reached €12.5 billion in 2025, up 23% year-on-year, with international investors contributing 58% of total capital.

Luxury property also remained resilient. International buyers now account for around 35% of Italy’s prime market, supported by continued demand for lifestyle properties and high-net-worth relocation.

Residential rental fundamentals remain attractive, with average gross yields of 7.23% nationally. Yields ranged from 9.17% in Catania to 5.26% in Milan.

Competition is strongest for Grade-A offices, energy-efficient buildings and prime coastal properties, where limited supply continues to support values.

Outlook

Italy’s property market is expected to remain positive but more selective.

Higher financing costs may slow leveraged purchases, while cash-rich buyers and international investors should remain active. Well-located, energy-efficient and income-producing assets are likely to outperform as the wider market moves towards more measured growth.

The post Italy Property Market Outlook 2026: Prices Rise as the Rate Cycle Turns appeared first on IQI Blog.