House Price Trends in Italy and France: Stabilization and Regional Shifts

Recent data from Italy’s Istat and France’s INSEE show that while national housing markets continue to feel pressure from rising costs, there are signs of stabilization, especially in resale markets. Trends differ across regions and types of housing, and for developers and investors, the diverging dynamics offer both risks and opportunities.

In Italy, the House Price Index (HPI) for Q1 2025 rose about 4.4% year-on-year, driven largely by existing/resale homes which saw roughly 4.9% growth. New builds, by contrast, cooled markedly, with new housing prices increasing only around 1.5% over the year and falling quarter-on-quarter. Analysts point to weaker demand for newly built units, higher energy standards, and cost pressures for developers as factors in that divergence.

Over in France, INSEE’s latest figures likewise show a modest upward move in house prices in Q1 2025. The general price index for dwellings (including both existing and new homes) rose by around 1.0% compared to the previous quarter. Existing home prices in metropolitan France also nudged upward by just under 0.4% compared with a year earlier, signaling perhaps a bottoming out after a period of decline. (Indices tracking price trends distinguish clearly between resale homes and new builds.) France’s housing supply indicators are mixed: building permits and the number of new construction projects have shown signs of recovery in some regions, but many projects remain delayed or constrained by permits or regulatory costs. INSEE reports that authorisations for residential construction have resumed growth in certain sectors, though starts (actual ground-breaking) lag in many areas.

In both countries, regional differences are sharp. In France’s Île-de-France (which includes Paris), prices remain relatively elevated, though growth is moderate. Outside of Paris, especially in less dense regions, price changes are more subdued or flat. Similarly, new build markets in Italy show weaker growth in peripheral or newly developing areas compared with established urban centers.

For market participants — developers, investors, homebuyers — these trends carry several implications. The stronger growth in resale homes suggests that buyers may prefer existing supply over new developments for reasons of cost, speed of availability, and lower regulatory or construction risk. Meanwhile, rising construction and energy compliance costs weigh on margins for new projects. Regions where permitting is smoother and infrastructure is more established appear best poised to benefit from modest demand recovery.

Looking forward, both Italy and France may see more pronounced activity in new housing once financing conditions improve and regulatory burdens ease. But for now, the housing markets are in a phase of adjustment: slower in new builds, gradually stable or recovering in established areas, and highly sensitive to local conditions.