How Much is a 100 Meter Flat in Madrid Worth?

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How Much is a 100 Meter Flat in Madrid Worth?
The cost of the same living space in Madrid oscillates between 1500 and 6000 euros per meter depending on the neighborhood
El País: Cuánto vale un piso de 100 metros
Inmaculada de la Vega reporting from Madrid September 25, 2011

How much does a 100 square meter flat in Madrid cost? The graph above answers this question with preliminary prices showing that the price of a square meter oscillates between 1500 and 6000 euros inside the capital.

Tasaciones Hipotecarias (Mortgage Evaluations) (TH) of the BNP Paribas Real Estate group ran this exercise which compared the costs of 100m2 flats with two restrooms on the first floor of buildings with elevators, medium quality exteriors and interiors, and a medium state of repair which do not have garages, storage rooms, balconies, pools, sports areas, or gardens.

The toolbox used and designed by TH takes into account up to 17 variables, and in this case they only changed the location of the real estate; “for coherence, the ages of the buildings also varied in keeping with the neighborhoods of the studios,” explained Antonio Roldán de la Cuadra, who is responsible for New Developments. It was necessary to vary the ages because flats with the defined characteristics have not been built in Chueca for 5 years or in Sanchinarro for more than half a century.

TH selected 33 places corresponding with the 21 Madrileño districts, with special emphasis on the most well-known neighborhoods and newest developments.

Why is the same flat more expensive in Sanchinarro than in the PAU next door to Monte Carmelo or Las Tablas? “Clearly, the quality of construction and surface area being equal, there is more pull for buyers to be next to El Corte Inglés [the most popular chaindepartment store], hospitals, or the Moraleja, and the greater demand has a bearing on the price. The same goes for Machupicha Avenue, which benefits from being in the neighborhood of the [park] Parque Conde de Orgaz.”

The greater the size, the lesser the price per square meter, and vice versa. So one must take into account that although the prices in neighborhoods like Recoletos are listed here at 6000 euros per square meter, that is for 100 square meters or more, and the most abundant flats in neighborhoods could come to 8000/m2 when one takes into account new promotions and comprehensive renovations for higher quality and smaller surface area (between 60 and 80m2). The same is true in the cheapest area of the city, Villaverde, where the majority of the flats are 50-70m2, and the majority also lack elevators, which also affects real estate value.

Roldán spoke of the difficulty of comparing new flats because of a lack of recent promotions, such that giving a single number for districts with typologies as different as Tetuán’s belies the heterogeneity of the product; in the periphery of the city, there is less oscillation.

The unitary price captured in the picture should be a starting point to orient a buyer. One must take into account that the existence or non-existence of an elevator between two stories produces a price difference of more than 40%. Height also explains an average difference of 12% between a first floor apartment used in this study and a fifth floor apartment in the same building [despite the existence of an elevator]. But it isn’t always that simple. Roldán de la Cuadra, who is also a professor of Statistics at the Universidad Carlos III, rejects the a priori use of percentages: “the presence of an elevator is not a simple coefficient. One must combine that with factors like the views or the quality of the property. The quality and location of comparable real estate near the one in question is also influential.”

These are the elements which condition the final price of a flat in order of importance: first, the floor area and location; second, the position inside the building and the existence or non-existence of an elevator; third, the quality of the real estate (exterior or interior) and its state of conservation; fourth, functional adaptation (age, number of restrooms, whether it’s a duplex, etc.); finally, elements like a garage, storage room, garden, pool, sports equipment, or a balcony.

One can ask for an open consultation on the website www.tasacionesonline.es or other assessors’ websites. At tasaciononline.es, a consultation costs 20 euros, VAT included. Information is updated monthly. And Propiedades (Properties) tracks the evolution of prices for these properties over a given time.

Roldán defines the lethargy of the current market like so: “The buyers have the perception that waiting is favorable whereas before it was considered detrimental. It’s a self-fulfilling prophecy: ‘Since the price is dropping, it will drop farther,’ they say, so they keep waiting.” The experts at TH say that since the maximum level of the market in 2007, real estate prices have dropped over 30% in southern Madrid and 5-10% in star districts like Salamanca, Retiro, and Chamartín. The largest dropoffs have been in the cheap flats. The crisis has hit those of modest means the hardest.

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