Optimise the development of existing properties: How to sustainably increase the value of your property
Is your property facing an uncertain future? Developing existing properties holds enormous potential, from increasing yield to sustainable value creation. Discover here how you can overcome the challenges and make your property future-proof.
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The topic briefly and concisely
The renovation rate in Germany is well below the necessary 2% for climate targets, at under 1%, indicating a significant need for modernization in existing buildings.
Energy-efficient renovations can increase property value by up to 20-30% and achieve an average 23% higher sale price on the market.
The demographic change requires an adaptation of the housing stock, particularly by creating more accessible living spaces to meet future demand.
Do you own an older property and wonder how to not only maintain its value but actively increase it? Given rising energy costs, new regulatory requirements, and demographic changes, a strategic development of existing properties is crucial. This article shows you how to unlock the full potential of your existing property through targeted analyses and modernization measures, minimize risks, and secure long-term returns. A professional evaluation, like the one offered by Auctoa, often serves as the first step towards well-informed decisions.
Understanding the current renovation situation in Germany
The renovation rate in Germany is at a low level. In 2023, it was only 0.70%, and for 2024, a similar rate of 0.69% is expected. However, to meet climate targets by 2030, an annual rate of at least 2% would be necessary. Approximately two-thirds of all residential buildings in Germany have low energy efficiency classes from D to H, which highlights a significant need for renovations. These figures underscore the urgency to address the energy-efficient modernisation of old buildings. The reasons for the hesitation to invest are varied, ranging from high costs to uncertainties regarding funding. Therefore, a thorough analysis of one's own property is essential.
Overcoming challenges and costs in refurbishing old buildings
The energy-efficient renovation of an old building presents owners with financial and planning challenges. The total costs for renovating an average single-family home can range from 50,000 to 150,000 euros. Specific requirements, such as those from heritage protection, can drive these costs even higher. Among the most common and effective measures are replacing outdated heating systems and renewing windows, which can lead to heating cost savings of 10-20%. In the long run, comprehensive renovations are often more economical than individual partial renovations, as they more sustainably improve energy efficiency and enhance value. A detailed condition assessment of your property helps to accurately determine the renovation needs and associated costs. This is an important step before you begin the planning of your old building renovation.
Particular attention should be paid to the following cost factors:
Extent of necessary insulation measures (facade, roof, cellar ceiling).
Need to replace windows and doors.
Modernization of heating and building technology.
Potential pollutant remediation (e.g., asbestos).
Heritage protection requirements in listed buildings.
Careful planning and obtaining quotes can help optimize costs by up to 15%.
Realise value enhancement potential through renovation
A professional renovation, particularly an energy upgrade, can significantly increase the value of your property. Studies show that comprehensive measures can lead to value increases of up to 20-30%. Energy-efficient buildings achieve on average 23% higher sales prices in the market than non-renovated properties of comparable location and size. Specific measures such as the removal of pollutants can also increase the value by 15 to 20 percent. This increase in value results not only from lower energy costs but also from improved living comfort and the future-proofing of the property. An investment in value enhancement through renovation often pays off multiple times. For an accurate assessment of your property's potential, an Auctoa valuation or a conversation with our ImmoGPT chat can provide valuable initial insights.
Vacancy in Old Buildings: Identify Causes and Harness Potential
According to the 2022 census, around 1.9 million apartments were vacant in Germany. The average vacancy rate is about 4.3%, with significant regional differences – it tends to be higher in East Germany. The main causes of vacancy in older buildings often include a high need for renovation, an unattractive location, or the impacts of demographic change in certain regions. However, a plot with older stock often holds untapped potential. By employing targeted development strategies, such as repurposing, modernisation, or even demolition and new construction, vacancies can be actively tackled and new, attractive living space created. An exact preliminary examination is crucial, especially when there are contaminated sites on the property. Revitalising vacancies contributes to enlivening town centres while also conserving resources, as fewer new areas need to be sealed.
Strategies for reactivating vacancies include:
Energy-efficient and aesthetic renovation to enhance attractiveness.
Layout changes to meet modern living needs (e.g. larger, more open spaces).
Repurposing, for example, former commercial properties into housing.
Infill development on the plot, if legally permissible.
Review of funding for renovation and conversion.
A feasibility study can clarify the most economical option here, often resulting in a return increase of 5-10% after successful implementation.
Demographic Change: Actively Shaping the Impact on the Real Estate Stock
The demographic shift has profound impacts on the German real estate market. By 2030, the proportion of those over 65 is expected to rise to 28%. This leads to growing demand for barrier-free or low-barrier housing. At the same time, rural areas affected by depopulation and an aging population could see a decline in population of up to 30% by 2040, potentially reducing demand and property values there. For owners of existing properties, this means considering adjustments early on. Converting to age-appropriate living spaces can not only secure rental prospects but also open up new target groups. In sustainable refurbishment of old buildings, aspects like flexible floor plans and accessibility should be considered from the start to secure long-term value. An evaluation of heritage-listed properties requires specific expertise. The comparison of new build or old building must also take these long-term trends into account.
Conclusion: Strategic legacy development as the key to success
The development of existing properties is a complex task, yet it offers considerable opportunities. Given the low renovation rates of under 1% and the large proportion of buildings that require energy-efficient upgrades, there is a significant need for action. Through careful analysis, strategic planning, and leveraging funding opportunities, owners can not only maintain but significantly increase the value of their property – often by more than 20%. Adapting to demographic changes and considering sustainability aspects are crucial success factors in this process. A thorough property evaluation is the first step to fully realizing the potential of your older property. Use the expertise of Auctoa and our ImmoGPT chat to successfully shape the development of your existing property and make it fit for the future. Your property has more potential than you might think!
development of legacy assets
Additional useful links
The Statistische Bundesamt provides detailed data on house prices and building land.
A current press release from the Statistische Bundesamt offers insights into relevant economic data.
Information on price indices is available at the Statistische Bundesamt.
The Statistische Bundesamt explains the revision of the House Price Index (HPI).
The Deutsche Bundesbank publishes its 2024 monthly report on the real estate market.
The Ifo Institut forecasts a slight increase in property prices.
The Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) offers a comprehensive report on housing construction in Germany in 2023.
FAQ
What initial steps are recommended for developing existing properties?
Start with a detailed inventory and a professional property valuation to realistically assess renovation needs, costs, and potential for value appreciation. Auctoa offers fast and data-driven evaluations for this purpose.
Is it always worth undertaking energy-efficient refurbishment of older buildings?
In most cases, yes. Besides the increase in value and lower energy costs (often saving 10-20%), you improve living comfort and meet future legal requirements. However, an individual cost-effectiveness calculation is advisable.
Are there grants for the development of existing buildings?
Yes, the federal and state governments offer various support programs (e.g., KfW, BAFA) for energy-efficient renovations and age-appropriate conversions. An energy consultation can help identify suitable funding which can cover up to 30% of the costs.
How can I avoid or address vacancy in my old building property?
Analyse the causes of vacancy. Targeted renovations, layout adjustments, or a change of use are often helpful. In regions experiencing population decline, alternative concepts such as multigenerational living can also be considered.
What are the biggest challenges in renovating old buildings?
Frequent challenges include unforeseen costs due to hidden defects, compliance with heritage conservation regulations, financing of the measures, and coordination of the various trades. Good planning and expert guidance are crucial here.
How can Auctoa help with my legacy development?
Auctoa provides you with fast and accurate assessments of your existing property through AI-supported analyses. This creates a solid data foundation for your renovation and investment decisions. Moreover, our ImmoGPT chat can clarify initial questions and provide guidance.
