Venice rising: Why global buyers are falling for canal-side palazzos

Venice is no longer just a backdrop for weddings and weekend escapes – it’s becoming one of Europe’s most desirable property markets. From trophy palazzos on the Grand Canal to historic flats in up-and-coming neighbourhoods, global buyers are snapping up homes in La Serenissima, drawn by its beauty, lifestyle and favourable tax regime.

Anybody who has visited Venice, the 1,500-year-old city that appears to float across waterways, will know it’s easy to fall under its spell. This jewel of northern Italy is built on a series of islands divided by almost  180 canals and connected by nearly 400 bridges and attracts close to 20 million tourists every year. It’s also where George Clooney married Amal Alamuddin in 2014 and where, if recent reports are to be believed, Amazon founder Jeff Bezos will wed Lauren Sánchez any day now.

But Venice is not just a city for special occasions. In recent years, it has attracted a steady stream of international buyers hungry for one of its canal-side palazzos. They have helped push average sale prices in the Veneto region up to €2,055 (£1,730) per square metre. This is a record for the area, where prices have risen consistently since 2017 and increased by eight per cent in the year to March 2025.

Meanwhile, according to eXp Realty, sale prices in other traditionally favoured Italian regions – Umbria, Tuscany, Sicily – are stagnating.

The majority of clients who come to Serena Bombassei, owner and managing director of Venice Real Estate, Knight Frank’s associate in Venice, are from overseas. British and French buyers have long adored Venice, and they have been joined more recently by an influx of Americans lured by the city’s charm as well as the advantageous exchange rates on offer.

“They come because of the culture, the food, because it is a safe and secure city, and for the quality of life,” says Bombassei. “There is no pollution, no cars, you are surrounded by water. Since Covid-19, everyone wants to make their dreams come true. They don’t want to wait.”

Another reason why overseas buyers converge on Italy is its tax regime, which appeals to high-net-worth individuals, says Ann-Marie Doyle, owner and managing director at Venice Sotheby’s International Realty. Since last year, overseas buyers wishing to reside there pay a flat €200,000 annual fee in lieu of tax on foreign income, meaning if you transfer tax residency to Italy this is all you pay on foreign-sourced incomes.

Bombassei’s clients looking to relocate to Italy often desire a trophy palazzo, measuring 450 to 900 square metres and with views of the Grand Canal. This kind of property would cost, she says, around €10 million.

Others are looking for historic apartments. Prices vary, but Doyle estimates that a two-bedroom flat would cost between €1.8 million and €3 million in San Marco and Dorsoduro, the city’s most upscale neighbourhoods, as well as anywhere along the Grand Canal. Up-and-coming options include Cannaregio and Santa Croce, around two kilometres from San Marco, where average prices for a similar property fall to €1.2 million to €2 million, says Doyle.

Wherever you choose to buy, you will pay a premium if you want a home on the piano nobile – the second floor, which traditionally contained a house’s grand entertaining rooms with high ceilings and original features.

Doyle believes Venice real estate is a safe investment thanks to the diminutive size of the city. “There  is a limited amount of property,  so prices are always going to go up,” she says. “There are always so many people hoping for their dream property, and there is very little stock at the moment.”

Despite its many charms, life in Venice is not without inconveniences. It is so hot in July and August that many Venetians go on holiday to escape both the temperature and the throngs of tourists who visit over the summer.

A longer-term threat is global warming. According to some reports the entire city could disappear as early 2100 if sea levels continue to rise. City authorities have recently installed an €8 million network of mobile flood barriers, which Doyle says have stopped regular flooding at high tide – for the moment at least.

“Buyers literally don’t even ask about global warming,” she said. “What they want is the dream, the lifestyle that Venice offers.”

First published in the July 2025 issue of BOAT International. Get this magazine sent straight to your door, or subscribe and never miss an issue.