The comprehensive reform of a home can increase its value by between 30% (in Madrid) and 35% (in Barcelona) compared to an original property, but the cost of materials and labor has skyrocketed in recent months so that rehabilitating a home is now between 20% and 40% more expensive than a year ago, according to a study prepared by the appraiser Gesvalt and the real estate agent Casavo.

Fernando Tisner, director of Casavo’s Madrid office, explained that a partial renovation (which includes an update of the appearance, including bathrooms and kitchen) usually costs between 300 and 350 euros/m2 (with prices without VAT, which for this type of work it is 21%), while if the reform is comprehensive and includes a change in the distribution of the rooms or facilities the cost reaches 600-650 euros/m2. In smaller flats the cost per meter is higher than in large ones.

José Antonio Salomón, director of studies at Gesvalt, explained that the value of a house with a comprehensive reform is very close to that of a new building (the difference is 4% in Madrid and 7% in Barcelona), and in five districts of Madrid, especially in La Latina, Chamartín and Centro, it is even higher. “They are usually old flats but in beautiful and well-located buildings, with features that new flats don’t have”, he sums up.

Compared to a year ago, however, the cost of rehabilitating has skyrocketed, especially that of windows and shutters, which are up to 50% more expensive than two years ago. “The rise in the price of raw materials coincides with the increase in demand, because the Next Generation funds have caused many properties to change windows to improve energy efficiency. This also drives up the cost of labor: there are no professionals”, assures Tisner.

According to the experience of Casavo (a proptech owned by the Agnelli Group and specialized in buying properties, refurbishing and repositioning them), the elements that most influence the cost of the renovation are the condition of the partitions and walls and, if it is possible to maintain them (20% additional to the budget), the windows and blinds (15%), the flooring (10%), the possibility of maintaining or changing the doors (10%) and the air conditioning (the budget is ‘expensive by 30% if it is not already pre-installed).

Salomón emphasized that the location of the property also influences the cost of renovating it (wealthier areas require the use of higher quality materials to bring the home up to par with those in the area) and especially in the profitability of do it “The cost of a partial renovation for an average flat can be around 45,000 euros, but this amount is a small percentage of the value of a home in the best neighborhoods of Madrid or Barcelona and it is easy to recover it when you return to sell; but this does not happen in areas where housing is very cheap”.

Most of those who buy a second-hand flat postpone the comprehensive renovation until years later. “Only in homes that cost more than 500,000 euros do the buyers completely redo the floor before moving in,” points out Tisner. “Banks finance only 80% of the appraised value of the home, and it is impossible for the credit to include the cost of works that have not yet been done.”

For an investor, Salomón points out, renovating a home allows it to be sold more quickly and also increases the income that can be obtained when renting it out. “A reform increases the value of the property in the long term – points out Tisner – and does not lose value until after five or six years, no matter how little the property is looked after”, he summarizes.