The real estate agency donpiso has reported a significant increase in home renovation prices, which have risen from 500 euros per square meter to 750 euros since the start of the pandemic in 2020. This increase, which exceeds 50%, has also been reflected in premium renovations, which previously cost around 600 euros per square meter and now reach 950 euros. Among the reasons for this rise are the pandemic, inflation, and the rise in the CPI driven by the war in Ukraine.
Despite this increase, donpiso argues that carrying out renovations before putting a property up for sale can be very beneficial. According to their estimates, a renovation can increase the value of a property by up to 50% and provide investors with a profitability of up to 14%. The time to sell a renovated property can also be reduced by half, which represents a significant advantage for those looking to make a quick sale.
On average, the time required for a renovation in Spain varies between 2 and 3 months, depending on the size of the property. For example, a comprehensive renovation in a 70 square meter apartment can be completed in approximately 2 months, while in a 200 square meter apartment the process could extend up to 6 months. This variability highlights the importance of considering both the cost and the urgency of the sale when making decisions about renovations.
donpiso’s experts recommend that the investment in renovations does not exceed 20% of the total value of the property. Although some renovations may be more expensive due to individual needs, it is always advisable to assess the budget and the time the owner has available. Miguel Ángel Vázquez, deputy general manager of donpiso, warns that those who wish to sell quickly to obtain liquidity may choose not to carry out renovations, while those with more time and resources could benefit from an increase in the value of their property.
However, Vázquez cautions that if the intention is to rent out the property, the profitability of a renovation may be lower. In such cases, if the property is already habitable, a comprehensive renovation may not be necessary, as the additional costs and vacancy time often do not translate into a significant increase in rent.
As an example, donpiso indicates that a property valued at 200,000 euros that needs 50,000 euros in renovations could easily be sold for 300,000 euros, thus achieving a profitability between 12 and 14%, depending on market conditions. In this context, sales timelines also show more favorable results, with a reduction of between 1 and 2 months for a renovated property compared to one that has not been renovated. For those considering the option of investment, carrying out a comprehensive renovation becomes essential, as leaving an unfinished apartment in the competitive real estate market is not attractive.
Source: MiMub in Spanish
