With no established model, senior housing remains a relatively new real estate sector in Italy – despite the country experiencing what sociologists have declared a 'demographic winter'.
According to Italian National Institute of Statistics (ISTAT) data, between 2022 and 2023 births dropped by 34.2% from 576,000 to 379,000. Meanwhile, the number of over-65s continues to grow, now exceeding 14m which represents around 24% of the total population.
In 2023, the Global Observatory of Long-Term Care estimated that 28.4% of over-65s in Italy are not self-sufficient, equating to almost 4m individuals.
This percentage is likely to increase: according to ISTAT, over-65s will represent 34.9% of the total population by 2050, with over-80s almost doubling in proportion from 7.6% to 14.1%.
The number of people older than 100 is estimated to increase from 19,000 in 2022 to 77,900 in 2050, with a corresponding increase in the rate of those who are not self-sufficient.
Italy's population is therefore one of the oldest globally, highlighting the need for more age-appropriate accommodation, care and assistance.
'The Global Observatory of Long-Term Care estimates that 28.4% of over-65s in Italy are not self-sufficient, equating to almost 4m individuals'
System struggles to meet seniors' needs
Healthcare residences find themselves at the centre of a crisis that highlights the structural limits of a struggling system.
The demand for senior accommodation continues to grow, especially in northern and central Italy due to population density. Meanwhile, supply is unable to satisfy demand, with a lack of specialised personnel and inadequate support policies in the real estate sector exacerbating the problem.
From an operational perspective, the shortage of nurses in Italy is acutely felt in the senior living sector, where it is difficult to attract and retain staff due to poor working conditions and uncompetitive wages compared with other areas of healthcare.
Increasing operational costs are another major issue, with fees for healthcare residences varying from €80 to €120 per day. Not all residents are entitled to public contributions, which are regulated differently from region to region and never cover more than 50% of expenses; old age or disability pensions are considered insufficient to meet healthcare residence costs.
Although senior living was included in Italy's pandemic recovery plan, the state has not increased funding in the sector, leaving only those with the income or family members willing to cover costs able to afford this type of accommodation.
When confronted with such financial pressures, therefore, many choose alternative arrangements such as homecare services.
Research identifies current approach and new model
Access to serviced residential facilities is still limited in Italy but remains achievable, and many argue it should be a national priority.
Tendercapital and the Luiss Business School in Rome recently analysed trends in housing for over-65s and identified an innovative model that would help to fulfil demand – one that combines independent housing with services such as healthcare and cultural and social activities for older people.
The research found that senior housing in Italy typically consists of self-contained apartment complexes – a model that is marketed to older people with independence as a lifestyle choice and clearly differs from rehabilitation clinics or nursing homes.
These facilities usually consist of private apartments, a reception area and a 24-hour health centre. They also include spaces for health checks, personal assistance and cultural, sporting and recreational activities that allow seniors to maintain an active and socially engaged lifestyle.
Operators express interest in emerging market
In Italy, large private healthcare and real-estate finance groups have been investing in the seniors care market since the early 2000s.
Most notable among these firms is Kos Care, controlled by De Benedetti's CIR and the F2i fund, the Italian branches of the French multinationals Korian, Orpéa and Sereni Orizzonti. Given the lack of beds, Sereni Orizzonti plans to open 20 new healthcare residences, with an investment of €200m over the next five years.
In 2020, though, a new senior living facility called the Domitys Quarto Verde was constructed in Bergamo, comprising 124 medium-sized apartments for rent. The Domitys model provides a consolidated offer throughout Europe, allowing its residents to have full autonomy and the opportunity to socialise. It is one of the only operators to have developed senior housing facilities in the Italian market.
The Korian model by contrast is characterised by assisted residential units aimed at those with limited independence, who tend to be older.
There are around 30,000 private senior housing facilities in Italy, owned and managed by just eight operators. One of these, Colisée, plans to increase its number of facilities to 60 to strengthen its position in Italy, France, Belgium and Spain.
Changes are expected in the market, with new operators and investors now taking an interest in the Italian senior living market as the fundamentals shift. Not only is the elderly population expected to increase sharply in coming years, as elsewhere in the world, but they can count on a significant level of wealth.
The reduction in multigenerational households in Italy has led to a growing demand for specific housing services for those over 65 who are still active; senior housing, which promotes independence and sociability, responds to this need.
Sector offers attractive investment
From an investor's point of view, this type of accommodation represents a lower risk, being less vulnerable to economic fluctuations and instead based on demographic trends. Prime yields do not generally fluctuate as much as they do for other real-estate asset classes.
With shifting trends and volatility seen in other traditional markets, investors recognise the strength, resilience and opportunities offered by later living.
Furthermore, it can encourage collaboration between different parties, such as local administrations, insurance companies and social security funds and institutions, helping reduce public and private spending.
Colliers data indicates that investment in the Italian senior living sector in 2023 was higher than before the pandemic, at €150m by the end of September, although this was still down from the peak of around €400m recorded in 2021–22.
With the support of targeted industrial strategies, the future of the sector appears promising for investors seeking long-term sustainable growth opportunities.
'With shifting trends and volatility seen in other traditional markets, investors recognise the strength, resilience and opportunities offered by later living'
Technology can enhance supported living
Smart home systems and artificial intelligence (AI) are unlocking an ever-growing number of possibilities for supporting seniors as they age.
From smart security to lighting systems, thermostats to pill dispensers, the Italian market is embracing devices that enable caregivers to monitor the activity of residents and intervene proactively to prevent problems.
Technology is also enabling adult children to maintain supportive home environments for their parents from anywhere, at any time.
Innovation of this kind can also add value by improving services. For this to work, the sector needs to adopt a systemic and integrated approach that encourages:
- the promotion of housing practices for active and healthy ageing that can meet the needs of a range of elderly users
- digital technologies and innovative services that support a higher quality of living, such as ambient assisted living
- the definition of strategies, protocols and tools that can help achieve new sustainability objectives for seniors' residences, and allow the construction market to adapt to these changes.
Opportunity remains despite cost pressures
In recent years, the senior living sector has suffered from higher capital costs, which have slowed investment by operators, and from the increased price of materials, which has put pressure on margins and increased insolvency risks as well as forcing the construction sector to scale projects down or stop working on them altogether.
Despite the higher income and net worth of pensioners in Italy compared with younger people, they would be unable to support a possible increase in costs from manufacturers to end users.
Ultimately, however, senior living is a solid and potentially profitable investment opportunity in Italy, supported by favourable demographic trends and a growing demand for dedicated housing for a growing elderly population.
Series offers global perspective on later living
The aim of this series is to explore the evolution, trends and drivers behind senior housing in different parts of the world. Discover more articles in the series below.