The need to renovate the plumbing systems within older apartment blocks is a well-known thorn in the sides of apartment owners and tenants alike. A huge amount of buildings in the country will require, or have already undergone the process, which involves the replacement of outdated copper piping systems.
It also sees apartment dwellers often ousted from their accommodation for a stint of at least two or three months, with a debt of tens of thousands of euros added to their home loan.
However, completing the renovations could be quite lucrative – at least for those planning on selling their flat.
Renovations can generate a tidy profit
On the slowed down housing market, OP claims that apartments in the capital city region that have undergone plumbing renovations fetch, on average, some 4,500 euros per square metre. In unrenovated apartment blocks the price is around 3,000 euros.
However, outside the capital region, the value of a flat seems to increase approximately on par with the actual cost of the revamp.
The banking group inventoried data on more than 3,000 apartment block dwellings over 30 years old that had completed full plumbing overhauls. As well as the capital city area, the Tampere, Oulu, Northern Savo, Päijät-Häme, Central Finland and Turku regions were examined for the study.
“Completing plumbing renovations quite clearly has an impact on the selling price,” says OP Group’s Real Estate Director Kenneth Sandberg. “A big enough sample was obtained to verify this throughout the country.”
Real estate managers not convinced
The bank concludes that, at least in areas surrounding Helsinki, getting the renovations out of the way can bring a sizable whack of added value for sellers. However, real estate management companies are more skeptical.
“I don’t perhaps believe the huge price leap,” says the head of the Finnish Real Estate Management Federation, Tero Heikkilä. “But certainly these days prices are starting to turn on the housing market in such a way that it’s worth doing the renovations.”
According to the Federation, apartment prices rise by a few percentage points more than the cost of renovations when the work is out of the way.
Less time on the market
One thing that both real estate management companies and the bank agree on is that renovated flats sell faster. According to the bank, in the Helsinki region homes are now sold in an average of one and a half to two months. A renovated flat will sell about a week faster than one that is being marketed in the shadow of an encroaching plumbing overhaul.
Throughout the rest of the country sales tend to take place up to three weeks faster if the building can boast a shiny new plumbing system.
Despite the cost and inconvenience, even looming renovations don’t necessarily drive buyers away. For home owners, such an investment in a building’s ongoing good condition is perceived as useful.