The Italian islands present a rich and varied real estate panorama, able to meet various investment needs. From the luxury markets of Capri and the Costa Smeralda, to the more affordable, yet no less fascinating proposals in Sicily and Sardinia: each island offers a unique experience, combining natural and cultural beauties, and real estate opportunities in the sector of sales or rentals. For those interested in buying a property, selling it or evaluating the short-term rental segment, the islands constitute unique markets, each with its own characteristics and singular charm. Proven by the growth data of real estate sales, which have on average doubled in almost all the islands: Elba passed from the 477 transactions in 2016 to the 860 in 2022; the eastern Sardinian coast in the province of Sassari which includes the Costa Smeralda area, in the same time span, recorded an increase from 1,579 to 2,816. Increase in sales also in the cities: Cagliari went from 1,510 transactions in 2016 to 1,966 in 2022; Palermo from 4,795 to 6,785.
In light of this data, which show a clear growth of the market, it is however important for those who want to invest to carry out a careful analysis, considering the specificities of each location and the dynamics of the local real estate market. Below we will analyze the real estate offer available on Elba Island, Capri and Ischia, Sardinia, Sicily and the price per square meter, to observe their potential yield and evaluate which are the locations where it is most convenient to invest, in terms of sales and rentals.
A house on Elba Island can yield up to 5%
Elba Island, a particularly renowned destination for its enchanting beaches andrich history related to Napoleon’s exile, presents an interesting real estate market. The average prices of properties range between 3,500 and 4,500 €/sqm in the most famous locations such as Portoferraio and Marciana Marina, and drop to about 2,500-3,000 €/sqm in less touristy areas. The annual volume of sales stands at around 500 units, with a potential rental yield that can reach 5%: thanks to the island’s natural beauty, in fact, the tourist demand remains high especially in the summer months.
Capri and Ischia: lower yields but long term returns
With its famous Blue Grotto, the stacks and the luxurious boutiques, Capri is perhaps one of the most well-known Italian islands among international tourists and its charm is undeniable. Here, real estate prices can even exceed 12,000 €/sqm with annual sales volumes of about 200 units. The yield of a house is generally lower compared to other islands (like Elba) and stands at around 2-3%, although the market offers opportunities for considerably more significant capital gains in the long term. Also in the Gulf of Naples, another gem of the Mediterranean is Ischia, famous for its thermal waters and its lush gardens. Compared to neighboring Capri, the Ischia market is more accessible, with average prices between 2,500-3,000 €/sqm and annual sales volumes of about 700 units. Here too, the yield ranges between 3 and 5%, guaranteed by the strong demand for short-term holiday rentals and long-term rentals.
Sardinia: prices from 10,000 €/sqm in Costa Smeralda to 2,000 €/sqm in Cagliari and Sassari
Sardinia, with its white sandy coasts and crystal clear waters, is a real natural paradise. In particular, the famous Costa Smeralda, renowned for its luxurious villas and exclusive yacht clubs, is one of the most sought-after real estate areas internationally. Here, prices can easily reach 10,000 €/sqm, with an annual sales volume that revolves around 1,000 units. The gross annual yield stands at around 4-6%, guaranteed by the constant demand for luxury rentals. The beauties of Sardinia, however, do not stop at the north of the island. In other areas, for example in cities like Cagliari and Sassari, prices are more accessible: the average here is 2,000 €/sqm but the rental yield can exceed 5% per year.
In Sicily, potential return of up to 6%
With its golden beaches, nature reserves and archaeological sites, Sicily is a destination increasingly populated by tourists (international and Italian) and a constantly evolving real estate market. Tourist locations such as Taormina and the Aeolian Islands are experiencing high real estate prices: the average is 4,000-5,000 €/sqm and the annual yield of around 4-5%. In the Aeolian Islands the number of sales has almost doubled from 2016 to 2022, going from 105 to 192. The scenario in large cities such as Palermo and Catania is also expanding, where prices drop to 1,500-2,000 €/sqm while the annual sales volume varies between 6,000 and 4,500 units. Particularly in Palermo, in 2022, the peak of sales was reached with a number of 6,785 transactions. These areas offer excellent opportunities for long-term investments, with yields that can reach 6%.
Conclusion
In conclusion, the real estate market of the Italian islands presents interesting and diversified investment opportunities in territories of great tourist attractiveness, rich in history, culture and breathtaking landscapes. Depending on the needs, those who wish can invest in locations with high costs and returns or in areas with more accessible prices, with long-term potential.
