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5 de June de 2023
Investments in a full property renovation see average returns of €308/m2 in Madrid and €511/m2 in Barcelona, equivalent to 47% and 79% returns on investment, respectively.
Gesvalt has teamed up with Casavo, the real estate platform that connects people looking to sell their home with potential buyers, in order to publish a report on Home Renovations in Madrid and Barcelona. The study, conducted using data from both companies, puts the average difference between in price between a fully refurbished home and one in need of renovation at €958/m2 the capital, and €1,161/m2 in the second city.
This means homes in Madrid which have undergone comprehensive refurbishments are worth 35% more, on average, than those which have not undergone any work since construction, while the figure sits at 42% in Barcelona. By way of example, an average home, with a surface area of 90 m2, could see its value increase in the Catalan city by more than €100,000 following a complete renovation, while in the Spanish capital the value could be boosted by over €85,000.
As for partial renovations, in other words those which do not involve any structural modifications, the difference can reach up to €438/m2 in Madrid and €528/m2 in the Catalan capital. This equates to an increase in value of 16% and 19%, respectively, with an average 90m2 home being worth 39,420, or 47,520 euros more.
The study also includes estimated renovation costs. According to the data provided, the average price of a standard-level partial refurbishment on a 90 m2 home ranges from €300 to €350/m2 in both locations. The price of a complete renovation could reach €600 – €650/m2 plus VAT. This data leads us to deduce the average return on a comprehensive refurbishment sits at €511/m2 in Barcelona, and €308/m2 in Madrid, equivalent to 47% and 79% return on investment, respectively.
These numbers are reduced for partial renovations, as investors in the Catalan city would see a return of €178/m2 (51%), while in Madrid the figure would be €88/m2 (25%).
Our report also underlines the fact a fully refurbished home continues to be worth less than a new build property, with average percentage differences sitting at 4% in Madrid and 7% in Barcelona. This deficit rises to 18% for partially refurbished residences in the capital and 22% in the second city. The difference is even more significant in relation to property that is yet to undergo any significant renovations, at 41% and 35% respectively.
However, the study reveals that the value of fully refurbished housing can indeed be greater than new construction in some districts of Madrid. This is the case in La Latina, Chamartin, Centro, Moratalaz, and Hortaleza. Conversely, the neighborhoods with the most significant price discrepancy are Puente de Vallecas, San Blas and Carabanchel. This phenomenon is not the same in Barcelona, however. In fact, the report shows that the best-performing districts in this sense are Gracia, Les Corts and Nou Barris, with a deficit of less than 2.5%. Meanwhile, areas with the greatest price discrepancy between new and fully refurbished homes are Sant Andreu (-17%) and Sants Montjuic (-13%).
An assessment of the variation in relation to partially renovated homes shows these maintain similar values to new build properties in both the Centro and Barajas districts of Madrid. This indicates that demand is placing greater weight on the location than property condition in these areas. The most significant discrepancy between partially refurbished housing and new build homes comes in the districts of Puente de Vallecas (-37%) and Chamberí (-30%). In Barcelona, the reduction in value of partially refurbished homes ranges from -10% to -33%, with the smallest variations reflected in the districts of Gracia, Les Corts and Eixample and the most significant being found in Sants-Montjuic, Nou Barris and Hota-Guinardó.
Sustainable renovations of Spain’s housing stock are displaying a continuous upward trend in the Madrid and Barcelona markets. According to the Gesvalt and Casavo report, a home’s sustainability level is fast becoming the most significant determiner of its value. Considering approximately 75% of the European Union’s real estate stock is inefficient in energy terms, the study reveals specialist building refurbishment firms are able to increase the energy efficiency of properties they renovate by up to 60%.
By way of example, a home initially given a G rating on its Energy Efficiency Certificate, with an energy consumption of 477 kwh / m2 per year and annual emissions of 100 kg CO2 / m2, can achieve a D following a full refurbishment. This represents a reduction in energy consumption of over 70%, down to about 135 kwh / m2 year, with emissions being cut 65%, to 34 kg CO2 / m2 year.
It should be noted that A, B or C grades are usually reserved for new build properties and that energy efficiency improvements will depend on the type of upgrades made in terms of thermal insulation on the walls and windows, and the replacement of hot water fittings, heating and cooling systems.