A bricklayer working on the rehabilitation of a facade. Europa Press

The price of home renovations has been rising for more than a year. The pandemic caused a turnaround in the price of raw materials and materials used in the construction sector. It also boosted demand. But the war in Ukraine and the current geopolitical context are further driving up the cost of making changes at home.

Just a year ago, the average price for a standard home renovation was 500 euros per square meter, while a high-end renovation cost around 600 euros per square meter. However, the constant growth in the price of materials such as wood, copper, aluminum or glass has increased the average price by 30% over the last twelve months.

According to the Donpiso real estate network, it is currently necessary to pay around 650 euros/m2 for the standard renovation of a house, while in the most premium 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 price of some materials has not yet peaked. And this generalized rise in the costs of housing reforms comes at a key moment for the sector in Spain, due to the distribution of European recovery funds for the energy rehabilitation of buildings. Fundamentally, the aim is to reduce the consumption of these buildings by at least 30%, by changing windows or heating and cooling systems.

The Council of Ministers has approved this Tuesday the distribution among the Autonomous Communities of 1,389 million euros of European funds to promote the refurbishment of buildings. The objective is to improve their energy efficiency and reduce, at least, 30% of the consumption of these buildings, with the replacement of windows or heating and cooling systems.

The government estimates that the distribution of funds will have a strong impact on employment and will allow the creation of some 180,000 new jobs to implement the reforms that can be carried out until 2026.

If there are no setbacks, it takes between two and three months to undertake comprehensive reforms of medium-sized homes. Although it all depends on the surface of the property. According to Donpiso data, if a house of 70 square meters can be renovated in a matter of two months, the work can take up to six if it has 200 square meters.

All this in case there is no shortage or lack of supply of some materials, as has occurred in recent months, forcing a rethinking of the schedule for the execution of the work.

Between 15% and 18% of total value

From the real estate company they recommend that the investment in the reform is between 15% and 18% of the total value of the property. Of course, the proportion can go up depending on the needs. If the property is going to be rented, its profitability is lower. The company calculates that if a property to be refurbished costs 200,000 euros and 50,000 euros are invested in the refurbishment, the property can easily be sold later for 300,000 euros.

According to his calculations, the renovation of a 75-80 square meter apartment located in a residential neighborhood can offer a return of between 12 and 14%. It can also halve the time it takes to sell the asset. Without refurbishment, an apartment takes between two and four months to sell, compared to one or two months for a refurbished apartment.

via elindependiente.com