According to a calculation made by the idealista research office, Italy’s leading real estate portal, the purchase price of a house is equivalent to an average of 11.9 years’ rent in Italy. The number of rentals required to buy a home is one of the indicators that can most help to assess whether one market may be more attractive than another to rent or buy a home.
It is purely indicative and does not pretend to solve the perennial dilemma of what is more convenient between renting and buying, as a number of factors affect this choice, such as individual preferences, time expectations, fixed mortgage costs and taxes.
That being said, a comparison of purchase prices and rental costs shows that the more rental annuities are needed to pay for the house, the more attractive it will be for the tenant to settle in it without buying. On the contrary: the lower the ratio between the average sale price per square metre and the average monthly rental per square metre, the more attractive it will be to buy.
If many years of rent are required to purchase, it means sales prices are high compared to rental prices; and vice versa – if few years are required, sales prices are low compared to rental prices.
The index must be assessed on a case-by-case basis, as each city presents a different scenario.
When comparing sale and rent prices, we see that the highest index is in the city of Sienna, with 22.8 years, followed by Cuneo (21.9 years), Trento (21.7) and Venice (21.2), while in Matera it is 20.6 years. All the other main towns require less than 20 years of rent to buy a house, but in almost all of them, they exceed the national average of 11.9 years. Only five cities rank below this threshold: Brindisi (11.6 years), Rovigo (11.2) Trapani (10.8), Syracuse (10.5), Biella (9.8).
In large cities such as Milan, the purchase price is the equivalent of 18.8 years of rent, while in Rome and Naples it is 17.8 and 17.3 respectively.
