25.06.2022
I am often asked if adding quality to a project or property will add value?
This is not an easy question, as it depends on what defines “quality” and whether the cost usually associated with higher quality is affordable.
The main issue in terms of quality is the location. So, the better the location, the availability of utilities, the view and proximity to urban infrastructure, the higher the quality. On a scale of 1 to 10, I would say this place would provide 3 points.
The second is design. We are horrified to see some spacious villas intended primarily for the Russian market, but others do not like them, and the most likely alternative buyers are Arabs. In this context , and despite the alternative design, which is mainly related to the exterior, it is also necessary to take into account the provided amenities – for example, private bathrooms for all bedrooms, storage space, covered garage. In this regard, I put 2 points.
The third parameter is the consumption of materials. Good quality materials cost more. For example, double and triple glazing of imported prefabricated kitchens, good quality marble and ceramics, use of VRV air conditioners (as opposed to conventional split systems), infinity pools as opposed to less expensive skimmers, blinds, smart electricity . at the installation, expensive items that are often accounted for. Nowadays, safety also plays an important role, such as the installation of a private elevator of two floors or more (a serious problem for people over 60 years old). In this context, I give this category 1 point.
The size of the garden is another point to keep in mind. Most gardens are not competitive in size, and as a general rule, I will suggest for permanent year-round living the average size of a garden is 2-3 times the size of a house, and for country houses about 1½-2 times. I add 1 point for the price.
Neighborhood also plays a role, which is especially important as prices go up and up. Thus, if a good quality home is located in a lower-rated area, it should be discounted on that basis alone. On the other hand, if we are valuing an apartment in a block that is in poor condition, its value is reduced due to low demand.
Neighbors also play their part in terms of quality. Noisy neighbors, buy for change, unlike household members, even age plays a role. So for the quality of the area I put 1 point.
Project management in complex development projects should also be considered. Good management and maintenance of common areas is paramount. What if the house is full of granite, marble and gold door handles, when the project as a whole is dilapidated, private roads are unmaintained, and common amenities are not used? In such cases, you do not have a good chance of selling the property at a reasonable price: 1 point.
Design amenities must also qualify for a point after the initial honeymoon period. Numerous properties turn into a nightmare if tenants don’t pay common expenses. We note some new projects with a project spa and extensive facilities such as an indoor pool that are not economically viable in terms of business value. However, initially they are attractive. Such objects are sold, but if problems follow, these objects will become a liability . However, I take ½ point as initial attraction.
The “name” of the developer plays a role in small countries like Cyprus. A good reputation for reliability and trust has its merits in terms of attractiveness, especially when the project is untitled/ in development: 1 point.
The cost of maintenance should play a role, but it doesn’t get its fair share. Content that is used free of charge or requires minimal maintenance should be credited to the point. Usually, maintenance-free materials cost more. Thus, the use of ‘spritz’ for exterior wall covering instead of paint, the use of exposed concrete as opposed to stone cladding is not taken seriously by the market (as it should be): 1 point.
Developers
Lest you think I’m exaggerating, the two developers in Nicosia not only sell for about 25% more than the competition, but they don’t have a property to sell.
These two are active in the local market, which is much more difficult than overseas.
Overall, these two developers, which reflect most of the points mentioned above, are selling for €3,000/sq.m. (apartments), while competitors sell for €2,500/sq.m. This increase in speed is the result of most of the points I have referred to; this is an example in particular to note and study.
The issues covered in this article vary from city to city, country to country, and person to person.
Major cities such as London, Paris and Athens have location as their main selling point, while others place less importance as a percentage of total points.
In central London, for example, a particular road is called “market”, while in Athens “most important” is the area, not the name of the road or a specific location.
Similarly, in Athens who is a neighbor is crucial, such as a well- known celebrity, whereas in the UK it is not so important.
Thus, quality has many interpretations, and its own assessment depends on the person.
Antonis Luazou – real estate appraiser, real estate agent and real estate consultant
