A construction worker renovating a building facade.Europa Press

The cost ofhome renovationshas been rising for over a year. The pandemic caused a sharp increase in the price ofraw materials andsupplies used in the construction industry. It also caused demand to skyrocket. But thewar in Ukraineand the current geopolitical situation are driving up the cost of home renovations even further.

Just a year ago, the average cost of a standard home renovation was 500 euros per square meter, while a high-end renovation cost about 600 euros per square meter. However, the steady rise in prices for materials such as wood, copper, aluminum, and glass has increased the average cost by 30% over the past twelve months.

According to the real estate network Donpiso, the cost of a standard home renovation is currently around 650 euros per square meter, while in the higher-end segments, the cost soars to 800 euros per square meter. This is partly due to the fact that the raw materials used to manufacture these products are imported from China.

They also warn that the prices of some materials have not yet peaked. And this general rise in the costs of home renovations comes at a pivotal moment for the sector in Spain, due to the distribution of European recovery funds for the energy-efficient renovation of buildings. Fundamentally, the goal is to reduce the energy consumption of these buildings by at least 30 percent by replacing windows or heating and cooling systems.

On Tuesday, theCouncil of Ministersapproved the allocation of 1,389 million euros in European funds among the autonomous communities to promote the renovation of buildings. The goal is to improve their energy efficiency and reduce energy consumption in these buildings by at least 30 percent byreplacing windows or upgradingheating andcooling systems.

The government estimates that the allocation of funds will have a significant impact on employment and will create some 180,000 new jobs to implement the reforms that can be carried out through 2026.

If there are no setbacks, it takes between two and three months to complete a full renovation of a medium-sized home. However, it all depends on the size of the property. According to data from Donpiso, while a 70-square-meter home can be renovated in about two months, the work can take up to six months if the home is 200 square meters.

All of this assumes there are no shortages or supply issues with certain materials, as has been the case in recent months, forcing us to revise the project's timeline.

Between 15% and 18% of the total value

The real estate company recommends that the investment in renovations be between 15% and 18% of the property’s total value. That said, this percentage may increase depending on specific needs. If the property is to be rented out, the return on investment is lower. The company estimates that if a home in need of renovation costs 200,000 euros and about 50,000 euros are invested in the renovation, the property can then easily be sold for 300,000 euros.

According to his calculations, renovating a 75- to 80-square-meter apartment located in a residential neighborhood can yield a return of between 12 and 14 percent. It also cuts the time it takes to sell the property in half. Without renovation, an apartment takes between two and four months to sell, compared to the one or two months it takes for a renovated apartment.

via elindependiente.com