What makes the sale price of a house go up or down in Spain?

There are many elements that will have an influence on the value of a property in Spain, including the condition and decor of the property, location and extra features.

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Property valuations in Spain / Photo by Kai Alyssa Bossom on Unsplash
11 March 2021, Redaction

Every home is unique and when selling a property in Spain, it is important to set a reasonable price that fits the property characteristics and the current state of the market. If the price you decide to put your house on the market for is too high, then this can mean a delay of months, if not years, until a buyer is found. The solution is to rely on the opinion of a qualified chartered surveyor who specialises in property valuation who will be able to clarify the things that will make the sale price of your house go up or down in Spain.

Calculator in hand, César Escobar, co-director of Control de Valoración, a property valuation company which is part of the Tinsa valuation society in Spain, explains that there are several factors that will instantly alter the property value. For example, the existence or not of a lift can modify the price of a house by up to 30%, the height of a property can add between 3,000 and 6,000 euros per floor, and a terrace can add up to 25%.

However, professional surveyors know how to differentiate between the value of the property and the opinion of the owner and buyer. They also know that the market takes unwritten rules and trends that appreciate or depreciate the total value between 5% and 15% for granted.

With the aim of valuing a property more realistically and knowing which things affect the price of a property, César Escobar has identified 27 characteristics based on location, type of property, age and property interior that increase or decrease the value of a property in Spain

Property location

Factors that increase property value:

  • Public transport: this is one of the factors that has the greatest impact on property prices "and will have the greatest impact in the future", explains Escobar. "Everything seems to indicate that the conditions of access to private transport to the city centre are going to be more restrictive, which is why people are looking for situations that allow them to travel comfortably by public transport", he comments.
  • City centre: housing in the city centre always carries a price premium, as it guarantees proximity to a greater number and variety of services within walking distance.
  • Nearby green spaces: having a park within a 10 or 15 minute walk is seen as positive by a large majority of buyers, whatever their profile.
  • Main street: properties located on the main street or streets of the neighbourhood are always valued higher than those located on secondary streets. The exception here are those affected by heavy traffic or noise.
  • Proximity to infrastructure and services: among the factors that increase the value of properties in Spain, proximity to service areas also stands out, with schools, hospitals, shopping and sports areas being the most highly valued.

Factors that decrease property value:

  • Road or commercial pollution: "The most common thing is that the buyer is looking for peace and quiet, so an excess of vehicle traffic or pedestrians in a commercial area can have a negative effect on the valuation," explains the expert.
  • Lack of socio-economic coherence: this is perhaps the most subtle of the conditioning factors linked to this section. "Socio-economic dislocation does not usually favour the sale, especially when it is above the social standard of the neighbourhood. On the other hand, a more modest type of property located in a more socially ambitious neighbourhood may be favoured", Escobar points out.

Building quality and age

Factors that increase property value:

  • Quality of the building: on this point, Escobar's opinion is unequivocal: "The higher the quality of the building and its finishes on the façade and in areas such as the entrance, lift or staircase, the higher the market value".
  • Garage: this is a factor that generally adds up, especially where on-street parking is more difficult. The best way to evaluate it is to find out the price of a parking space in the area. "In Madrid this does not have the same impact on the price of the property as it does in areas where a parking space costs 60,000 or 80,000 euros, compared to where a garage space costs 12,000 euros".
  • Technical Building Inspection: depending on whether it is positive or negative, the potential buyer knows whether or not he or she is going to have to pay the next installment. And in view of the deficiencies indicated in the report, the amount of the charge can be assessed.
  • Community services: a building that offers above-average community services is overvalued. For example, a community with a swimming pool in the city centre (something that is not usual in Spanish urban planning) can increase the price between 5% and 15%.
  • Buildings with special protection: this is usually a sign of exclusivity and above-average quality due to its architecture, age or history, and therefore weighs favourably. "These properties may have exemptions when it comes to the payment of IBI property tax. On the other hand, their special cataloguing can lead to greater demands on their conservation," he explains.
  • Energy Performance Certificate: from the point of view of professional property valuations, the higher the rating, the higher the value. However, the Spanish market still does not value what greater energy efficiency implies, something that "will gradually change in a context of rising energy bills", considers Escobar.

Factors that decrease property value:

  • Age: the general rule says that the older the property is, the lower its value. Of course, there are exceptions when conservation is demanding.
  • Lift: the lack of a lift is one of the factors that can most devalue the price of a property, in percentages as significant as 30% for homes without a lift in the centre of Madrid. In areas where the standard building does not exceed 3 storeys, the reduction in price tends to be around 7%.
  • Community fees: "In a location with high purchasing power, this is not very relevant", Escobar clarifies, "but in the rest of the real estate segments, the fewer the fixed costs, the better". 
  • Deficit of services: a relatively new situation is that of a property whose owners' association offers services below the average of those offered in its neighbourhood. For example, in a housing estate environment, housing located in a community without sports facilities is devalued in value.
  • Low commercial floors: businesses located on the ground floor of a block of flats can also influence the price: the buyer rejects businesses that are associated with noise, smells, traffic or nightlife.  

Property interior

Factors that increase property value:

  • Exterior flat: it is normal that an exterior flat, one that usually faces the street and has more natural light, is always more expensive. This statement can change when the property faces a street with excessive traffic or noise or when an interior apartment faces a large and well-lit courtyard. 
  • Quality of the finishes: the quality of the finishes of a property count for between 5% and 10% of the house value, "but appraisers always value it for an average buyer in average conditions", Escobar explains. "Even if you have put in some gold taps or the interior design is really unique, we are not going to take it into consideration because not all buyers are going to appreciate it as an improvement".
  • Smaller homes: one important thing to remember is that comparing the value per square metre in the area is a mistake. For example, the price will always be higher in a 60m2 flat than in a 120m2 apartment.
  • Balcony or terrace: "With the pandemic, there is a real obsession for homes with terraces", the expert points out. "When its surface area is greater than 15 m2 it can add between 20% and 25% to he property value.
  • Rooftop terrace: this is an authentic real estate treasure at the moment as it is the most coveted. 

Factors that decrease property value:

  • Floor plan: this is a very important: "In new construction, the price of the same flat rises per floor between 3,000 and 6,000 euros". Valuation experts at Tinsa explain that mezzanines and first floor flats are always have lower prices than the rest of the building, and basements, semi-basements and ground floors have major marketing problems as homes.
  • State of conservation: a standard renovation of a 90 square metre property can cost around 60,000 euros. After 10 to 15 years, it is considered paid off by the surveyor, unless it offers a very careful conservation or its finishes are of special quality.      
  • Interior layout: the surveyor pays special attention to the useful square metres of a property: "the passage areas to connect rooms without use, the houses with a tube structure for its large corridor, attic or with ventilation difficulties, are penalised".
  • Lack of annexes: in a context of reduced space in the home, not adding spaces such as storage rooms or communal bicycle rooms to the property takes away from the value.
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