Costa Smeralda on the island of Sardinia remains a well-established location in Italy for the prime residential market. Emerging into global consciousness during the 1960s with the redevelopment of the area by Aga Khan, with beaches like the Maldives framed by lush Mediterranean scrub, the region has seen strong performance across its prime residential market for years. Despite a decrease in transactions, prices and rents continue to rise.

Prime residential prices in Costa Smeralda are benefitting greatly from the global push to lifestyle locations, with 80% of all buyers coming from international backgrounds. In 2023 prices increased by 18%, the second highest in Italy, largely driven by low levels of supply and high international demand. Villas with countryside and sea views are in particularly high demand, and Costa Smeralda is well placed to offer these.

Costa Smeralda’s prime rents have doubled in 2023 and tripled compared to 2019 values, supported by strong international demand. The post-pandemic trend increasing desire for luxury holiday lets has been particularly noted in this region, as visitors are seeking higher degrees of privacy and the possibility of personalised services. Renters are also looking for a similar lifestyle as buyers, with a large emphasis on access to nature and open countryside.

Transactions grew by 13.5% on 2019, but decreased by -20.2% in 2023, one of the most significant decreases we have seen in the prime Italian markets. As most buyers in this region are international, global macroeconomic uncertainty does tend to play a larger role in this market. These factors will likely continue in the first part of 2024; however, the later part of the year may see rate cuts and spur more activity on Costa Smeralda.