Buying a run-down property and reselling it after renovation can deliver returns of 24% to 31%, depending on the property type, according to an analysis by idealista. Studios offer the greatest potential for appreciation, with well-maintained homes priced 31% higher than those requiring renovation. One-bedroom flats follow with a 29% return, then two-bedroom properties at 28% and three-bedroom homes at 26%. Larger properties, with four or more bedrooms, show the appreciation at 24%.
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For this study, idealista analysed price differences per square metre between homes listed in good condition and those requiring renovation – without factoring in refurbishment costs. This makes the data particularly useful for investors, as it highlights the real potential return on investment after buying, renovating and reselling a property.
Capital appreciation
In higher-priced, high-demand markets, the trend is reversed – appreciation increases with the number of bedrooms. This is likely because strong demand and high prices make a property’s condition less relevant, leading to a levelling of prices, particularly in the lower segments.
This is the case in cities such as Barcelona, where studios show a 15% uplift, rising to 24% for homes with more than four bedrooms. In San Sebastián, returns range from 10% for studios to 23% for larger properties, while in Madrid they increase from 10% to 23%. A similar pattern appears in Palma, where gains go from 15% for studios to 24% for the largest homes.
In other cities where price pressure is beginning to approach these levels, appreciation remains largely stable – as seen in Bilbao (from 23% for studios to 24% for homes with four or more bedrooms), Málaga (from 22% to 24%) and Valencia (from 27% for studios to 24% for four-bedroom properties).
In the rest of Spain’s provincial capitals, the trend follows the national pattern, with appreciation decreasing as property size increases. Nine provincial capitals record gains of 50% for studios: Cáceres, Ciudad Real, Cuenca, Huesca, Jaén, Lleida, Lugo, Palencia and Zamora.
For two-bedroom homes – typically considered the ideal size for the average Spanish household – Lleida and Zamora lead with appreciation of 39%, followed by Cáceres, Jaén and Lugo, all at 38%.
Data compiled and analysed by idealista/data, idealista's proptech, which provides information for a professional audience to facilitate strategic decision-making in Spain, Italy and Portugal. It uses all the idealista database parameters in each country and other public and private data sources to offer valuation, investment, prospecting and market analysis services.
