Pipe renovation is almost always the largest and most expensive renovation in a housing company. According to a 2019 survey by the Housing Manager Association, traditional pipe renovation costs on average, 740€ / m2 and pipe renovation made with coating technologies, costs 290€ / m2.
The effect of pipe renovation on home prices has been studied and the results indicate that the upcoming renovation will negatively affect apartment prices several years before the renovation and will intensify as the renovation approaches. After the renovation, the price of the apartment will increase but it will not cover the renovation costs. When the cost of renovating an apartment is added to the cost of the renovation within a year of the renovation, the total cost is, on average, about 11% higher than that of an apartment where there is no upcoming pipe renovation. In smaller apartments, where the relative cost of renovation is higher, the difference is even greater.
What explains the difference? For many people, soon-to-be renovated apartments can be more attractive because the buyer then has the ability to influence the style and furnishings of the kitchen and bathroom. There is also a psychological effect: the seemingly lower pre-renovation price attracts more potential buyers. The lower price also allows more people to get the necesary financing to buy a home, which increases the number of potential buyers.
Here are some basic rules about pipe renovation on the real estate market
If you do not intend to live in the apartment after the pipe renovation has been done, you should sell the apartment before the pipe renovation
If you are buying an apartment, it is a good idea to buy it after the pipe renovation
However, if you are considering buying a home before pipe renovation, always remember to add the total cost of the pipe renovation to the price and compare it to similar apartments where the pipe renovation has already been done.
Sources: Isännöintiliitto: Putkiremonttibarometri 2019, Natalia Nikola: The effect of pipe repairs on housing prices (2011)
