Italian housing prices show 0.7 elasticity to population shifts

The study utilizes an annual panel dataset covering 7,785 Italian municipalities—about 98 percent of the national total—between 2010 and 2025.

Combining property price data from the Revenue Agency's real estate market observatory with demographic records from ISTAT, the authors investigate how residential values respond to population changes over time.

The empirical analysis reveals a long-run elasticity of approximately 0.7, indicating that a permanent 10 percent decrease in population associates with a roughly 7 percent decline in housing prices.

While short-run effects remain subdued due to the inherent inertia of real estate markets, price adjustments accumulate gradually over extended periods.

The research highlights significant regional heterogeneity across Italy's territory.

The statistical association between demographic trends and property prices is markedly stronger in non-inner municipalities and urban centers across the Center-North.

Conversely, the relationship weakens substantially in inner areas, where depopulation trends present different structural challenges.

Robustness checks, including cross-section variations and pandemic-era demographic shocks, confirm the stability of these findings across diverse empirical specifications.