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

Fernando Tisner, director of Casavo’s Madrid office, explains that a partial reform (which includes updating its appearance, including bathrooms and kitchen) usually costs between 300 and 350 euros/m2 (with prices without VAT, which for these works is 21%), while if the reform is comprehensive and includes a change in the distribution of rooms and facilities, the cost reaches 600-650 euros/m2. In the smaller apartments, the cost per meter is higher than in the larger ones.

José Antonio Salomón, director of Gesvalt Studies, explains that the value of a house with a comprehensive reform is very close to that of a new construction (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 tend to be old apartments, but in beautiful and well-located buildings, with characteristics that new apartments do not have”.

Compared to a year ago, however, the cost of renovating has skyrocketed, especially that of windows and enclosures, which are up to 50% more expensive than two years ago. “The rise in raw materials coincides with the increase in demand, because the Next Generation funds have meant that many properties are changing windows to improve their energy efficiency. That also triggers the cost of labor: there are no professionals”, says Tisner.

According to the experience of Casavo (a proptech owned by the Agnelli group specializing in buying real estate, reforming and repositioning them), the elements that most influence the cost of the reform are the state of the partitions and walls, and whether it is possible to maintain them (20 additional % in the budget), the windows and blinds (15%), the flooring (10%), the option to maintain or change the doors (10%) and the air conditioning (the budget goes up 30% if it is not already available). pre-installed).

Salomón points out that the location of the property also influences the cost of reforming it (the wealthier areas require the use of higher quality materials to bring the home to the level of those in the area) and especially the profitability of doing so: “The cost of a Partial reform for an average apartment can be about 45,000 euros, but that 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 selling it again, but that does not happen in areas where housing is very cheap.”

Most of those who buy a second-hand apartment postpone their comprehensive reform until years later. “Only in homes that cost more than 500,000 euros do buyers completely redo the apartment before moving in,” says 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,” he adds.

For an investor, Salomón says, reforming a home allows it to be sold faster and also increases the income that can be obtained by renting it. “A reform increases the value of the property in the long term – Tisner points out – and it does not lose its value in five or six years, as long as the property is taken care of”.

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