Realtor: It's Worth Renovating the House Now, It Will Be Even More Expensive Later

It is worth renovating an apartment building despite the fact that the cost of living has risen rapidly. Prices will continue to grow in the future, but inflation and general income growth will make loan payments more affordable, comments Egon Juhanson, a real estate broker at ELUM Kinnisvara.

"Since construction prices and Euribor have risen, we are hearing more and more concerns from building residents about whether they can afford renovation at all," explains Juhanson about the current situation. "For some buildings, the monthly repair fund fee per apartment would increase to 3–4 euros per square meter, which for a 65 square meter apartment would be 195–260 euros. These are large sums and this causes many people to vote against it."

The exact monthly payments are determined by the size of the personal financing contribution, the scope of renovation work, and the length of the loan. Buildings in a worse situation are those where a significant repair fund has not been accumulated to date or where a larger sum was recently spent due to some work.

However, according to Egon Juhanson, it is worth considering that by starting renovations now, future price increases can be avoided. "Construction prices will continue to rise broadly. Various requirements are also increasing and the green transition adds to the costs," he says.

The loan payment will remain more or less the same over time; the only change could be Euribor, which is expected to continue falling in the long term. However, inflation makes the loan increasingly affordable over the years.

When talking about building renovation, the most common discussion is about heating costs, which become cheaper as a result, but in reality the benefits are much greater. The living environment, ventilation, and general well-being all improve.

"As far as buyer interest is concerned, renovated buildings are always ahead of others. It is a known fact that an apartment needing repairs in a well-maintained building is more liquid than a renovated apartment in a neglected property. Banks also finance loans for apartments purchased in buildings with higher energy classes on more favorable terms," concludes Egon Juhanson.