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We are very often faced with the question of whether adding quality to a project/property will make it pay.
We can assure you that this is not an easy question to handle, since it depends amongst other things, what quality is and whether the cost, usually related to the higher quality, is affordable by the wider market.
(a) We will say that the primary question in terms of quality, is the location. So, the better the location, the availability of public services, the view, proximity to urban facilities etc, the better the quality. In terms of 1-10 points, we will say that location will secure the 2 points.
(b) The second matter is that of the design. We watch in horror some spacious villas designed primarily for the Russian market, but, save that particular market source, they do not appeal to many others, with the most likely alternative buyers being Arabs. In this context and notwithstanding an otherwise alternative design, which refers mainly to the external appearance, one must consider also the facilities provided – e.g. individual baths for all bedrooms, storage space, covered garage, etc. In this context, we will give 2 points.
(c) The third parameter is the cost of materials. It is the norm that good quality materials cost more. Double and treble-glazing imported readymade kitchens, good quality marble/ceramics, the use of VRV air conditioning as opposed to ordinary split units, the overflow pools, as opposed to the less expensive skimmer type, the use or not of shutters, the smart electricity installation are costly items, which are taken into account by the market. In this context, we will give this heading 1 point (in terms of luxury materials).
(d) The garden size is another item to be remembered. Most gardens are not competitive in terms of size and as a rule, we will suggest for permanent houses an average garden size for permanent homes 2-3 times the house size and in terms of holiday homes 1½-2 times. In terms of value, we adopt 1 point.
(e) The neighbourhood plays its role, and this is especially important, as house costs go up and up. If a house of good quality is set in a downgraded neighbourhood, it should be discounted on this account alone. The neighbours also play their role in terms of quality. Noisy neighbours, buy-to-let neighbours, as opposed to own home users, even the neighbours’ age play their role. In terms of quality of neighbourhood, we adopt 1 point.
(f) Management of projects in comprehensive developments is also a point to be considered. Good management and maintenance of the common areas are of paramount importance.
What if the house is full of granite and marble, gold door handles etc, when the project as a whole is rundown, the private roads are unkept and the common facilities are out of use? In such cases, you do not stand a good chance of selling the property at a reasonable price -1 point.
(g) The facilities provided in a project should claim also a point, be it after the initial “honeymoon” period. If the residents do not pay their common expenses, the numerous facilities become a nightmare.
We note some new projects which have a spa and other extensive facilities, such as an indoor pool, which are non-economically viable in terms of business value, but at an initial stage, they are appealing. These sorts of facilities sell, but if problems follow, then these facilities will become a liability. As an initial attraction, however, we adopt ½ point.
(h) The developer’s “name” plays its role in small countries such as Cyprus. A good name which gives reliability and confidence, has its merits in terms of attraction, especially when the project has no titles/under construction –½ point.
(j) Maintenance costs should play a role, but it does not get its fair share. Materials, which are used and are free/limited maintenance, should be credited with a point. Usually, the maintenance-free materials are costlier. So, the use of spritz instead of paint, fair-faced concrete as opposed to stone cladding, etc are not taken into account seriously by the market – 1 point.
So that you do not think that we are exaggerating, two Nicosia developers (out of the hundreds) not only sell approximately at 25% more expensive than the competition but also they have run out of properties to sell. These two developers are active in the local market, which is by far more difficult than the foreign one.
So as a whole, these two developers reflect most of the points referred to before, sell at €3,000/sq.m. (apartments), whereas the competitors sell at €2.500/sq.m.
This rate of ±25% increase is the result of most of the points that we have referred to before and it is an example to learn from.
The points given in this article differ from town to town and from country to country, as well as from person to person. Large cities such as London, Paris, Athens etc have the location (address and even the particular street name abutment) as the main point of sale, whereas others place lesser importance as a percentage to the total points.
In central London, for example, the name of the particular road is “the market”, whereas in Athens the neighbourhood is “the most” important and much less the road name/ location.
Similarly, in Athens who the neighbour is, is of crucial importance, e.g. a known celebrity etc, whereas in the U.K. this is not so important.
Quality, therefore, has many interpretations and at the end of the day, it will depend on the individual to place his own score.
