There are 12,000 buildings Needing Renovation in Prime Areas of Lisbon
13 October 2017
The market for renovations is worth about 26 billion euros, with 1.5 million buildings (30% of the total national building stock) in need of works. Just in the prime areas of Lisbon, there are 12,000 buildings require renovations.
Figures advanced by Francisco Quintela, partner and co-founder of Quintela & Penalva, which operates primarily in the prime segment, reveal that approximately 70% of the sales of renovated buildings can be found just in the historic centre of Lisbon, with average prices up to 35% above those of the rest of the city.
As the increase in demand raises prices, the executive states that prices in Lisbon’s historic centre increased 9% compared to 2016. In the last five years, investments in renovations amounted to 600 million euros. Francisco Quintela also believes that the numbers will continue to “to increase in the next two to three years, given the interest in these specific properties by investors with the necessary financial capacity.”
There are flats in Lisbon with prices between 10 and 12,000 euros/m2
The head of Quintela & Penalva also revealed that data indicate that the average value of real estate in Lisbon, in premium locations, is 6,800 euros/m2. “When we find that renovations in the historic central zones cost 6,400 euros/m2 and that it is in the historic zones that we find the most expensive developments, with apartments that can be between 10 and 12,000 euros/m2, we can then see that in many situations, renovation values are already superior to those of new housing.”
Ricardo Sousa, Administrator of Century 21 Portugal, also believes that there has been a profound transformation of existing buildings and their use in the historic zones, together with a considerable increase in the number of visitors to the city. “The combination of these factors is allowing these areas of the city to gain a great attractiveness for real estate solutions for tourism purposes and the premium housing segment,” he explained.
And because there is an evident lack of supply of new construction, consequently, refurbished properties stand out and attract a large number of interested parties. “We do not believe that prices are currently inflated, but we note and regret the concentration of supply in the middle and high-end segments,” Ricardo Sousa stated.
Renovations also a focus of buyers in Porto
As for the city of Porto, Joana Lima, head of the consulting firm Predibisa for the Renovation segment, stresses that the historic centre has the highest levels of demand, due to the charm of the buildings and the associated profitability. “Demand is higher than supply, both of buildings that require refurbishment and already renovated flats, which has provoked an increase in prices. In some areas such as Rua das Flores and Rua Mouzinho da Silveira, we have seen a 25% increase per year in values,” she pointed out.
It also shows that depending on the area and the quality of the renovation works, average prices are between 2,700 and 6,000 euros per square meter.
“Demand in Baixa has been growing steadily, especially in buildings with historical characteristics that are undergoing renovations. This process is similar to what happened in other European cities with historic centres boasting great architectural quality, revealing that these are currently the most valued areas. Porto is just following this trend,” Lima stated.
Original Story: Diário Imobiliário
Translation: Richard Turner