25.06.2023
We are often faced with the question of whether the quality of a project or property will increase its value. Of course, this is a difficult question, as the definition of “quality” can be subjective and also depends on the affordability of the price, which is usually associated with higher quality in the market.
Contents
The main issue in terms of quality is the place
The better the location, availability of utilities, views, proximity to urban infrastructure, the better the quality. Given a scale of 1 to 10, we think location will provide 4 points.
Design
I am horrified to see some of the spacious villas, designed primarily for the Russian market, but whose design is not liked by many others, the alternative is only wealthy buyers from the Middle East. In this context , and despite the design, which is mainly about appearance, it is necessary to take into account the provided amenities – for example, private bathrooms for all bedrooms, storage space, covered garage. In this regard, we will give 2 points.
With the cost of materials
The third parameter is the cost of materials. It is normal for higher quality materials to cost more. Double and triple glazing, imported prefabricated fitted kitchens, good quality marble and ceramic tiles, use of VRV air conditioners instead of conventional split systems, infinity pools as opposed to less expensive skimmers, shutters, smart electricity installation, which are taken into account by the market. In this context, we will give this title a 2 (in terms of luxury materials).
Garden area
The size of the garden is another point to keep in mind. Most gardens are not size competitive, and as a rule of thumb, I suggest an average garden size for permanent homes is 2-3 times the size of the house, and 1.5-2 times the size for holiday homes. Score 1 point.
Location and neighborhood
When it comes to real estate, neighborhood matters a lot. If a high quality home is in a low rated area, its value may be lowered just because of that. For example, if we are valuing an apartment in a block where there are several tenants who do not care about the building, this may reduce the value, since the locals do not create the best living conditions, except for people with a different attitude.
Neighbors also play a role in determining quality. Noisy neighbors can influence buying decisions, and the age of neighbors can also play a role. For the quality of the area, you can add 1 point.
Project management
Project management in complex developments is also an important aspect to consider. Good management and maintenance of the common areas is paramount.What if the house is filled with granite and marble and the doorknobs are made of gold, but the overall project is in a state of disrepair, the private roads are unmaintained, and the common facilities are not being used?In such cases, you will not have a good chance of selling the property at a reasonable price: 1 point.
Provided objects in a project must earn a point after the initial honeymoon.
Numerous facilities become a nightmare if residents don’t pay their common expenses.
I note some new projects that have a spa and extensive facilities such as an indoor pool that are not economically viable from a business standpoint, but are attractive initially. Such objects are sold, but if there are problems, then these objects become a burden. However, at the initial stage, I assign 1-2 points.
Developer brand
The “name” of the developer plays a role in smaller countries like Cyprus. A good name that provides reliability and credibility has its merits in terms of attractiveness, especially when the project does not yet have title documents or is still under construction: 1-2 points [or more depending on the problem of documents].
The cost of maintenance should play a role, but it doesn’t get its fair share. Materials that are used and are free or require minimal maintenance should be credited to the point. Usually, maintenance-free materials cost more. Thus, the use of “spritz” on exterior walls instead of paint, exposed concrete instead of stone cladding is not taken seriously by the market: 1 point.
Lest anyone think I’m exaggerating, two developers in Nicosia (out of hundreds) are not only selling at prices 25% higher than the competition, but have already sold all of their properties. These two developers are active in the local market, which is much more complex than the foreign market. These two developers reflect most of the above factors, selling for 320 euro/sq.m. (apartments), while competitors sell for 250 euro/sq.m. This 25% increase is the result of most of the factors mentioned above and is an example worth looking at and learning from.
The points awarded vary from city to city, country to country, and person to person. In big cities such as London, Paris and Athens, location (address and even the name of a particular street) is a major selling factor, while for others it matters less.
In central London, for example, the name of a particular street is important, while in Athens the area is more important and the street name/location is less important. Similarly, in Athens, neighborhood is important, such as the fame of the residents, while in the UK it is not so important. Quality has many interpretations and depends on the individual assessment of each person.
