Renovating a luxury home in Spain is an investment that pays off. This is the conclusion drawn from a study carried out by Barnes, a real estate agency specialising in the high-end market, in which it analyses the cost-benefit of renovating luxury and mid-range homes in Spain.
According to their data, the average investment in a high-end property is around 650 euros per square metre, a figure that is not even double that of a standard property in Spain, which costs around 350 euros per square metre on average. On the other hand, the price of a luxury refurbished property in Spain can increase up to 65%, as opposed to 20% in the case of a normal property, depending on its characteristics and location.
In this sense, Barnes explains that “a 200m2 flat in a prime area of big cities such as Barcelona and with a value before being renovated of 1.2 million euros can be revalued up to 2 million euros after its renovation, so the price would go from 6,000 euros/m2 to 10,000 euros/m2. On the other hand, in a mid-range apartment of 70m2 with a price of 250,000 euros, the sales price could rise to 300,000 euros after a comprehensive renovation”. To reach these figures, the real estate agency estimates that a luxury home would need an investment of around 130,000 euros and a standard one, of around 24,000 euros.
These mismatches between the cost of renovating per m2 and the potential for revaluation of properties are explained by the requirements of the demand in the luxury market, where buyers are looking for new or recently renovated properties, while second hand housing is the one that takes precedence over traditional transactions.
“We have exclusive properties for a very demanding buyer who knows exactly what they are looking for, so it is very important to offer a product that is in perfect condition and lives up to expectations. In fact, most of our clients ask us for new or renovated properties, so it is very convenient that the owner who wants to sell their house has renovation before sale in mind and is aware that it can be a very good investment”, says Elizabeth Hernández, director of Barnes Barcelona.
The real estate agency also points out that, besides adapting to what the demand is looking for, in Spain the renovation of the residential stock is also necessary, since more than 60% of houses were built more than 30 years ago. In fact, experts in renovations point out that the coronavirus confinement in Spain has triggered more interest in carrying out home improvements by households. Keep in mind that the summer is the best time of year to carry out such work, with more time availability and reducing inconvenience for neighbours, among other reasons.